Why this RIA prefers to serve clients from rural Maharashtra
3 min read . Updated: 23 Jan 2023, 10:40 PM IST
PremiumNitin Sawant caters to 140 families; small-town doctors in Pune and Sangli form the bulk of his clients
The son of a factory worker in Parel, Nitin Sawant is not your typical investment adviser. He does not focus on the richest 1% of India’s society. Instead, small-town doctors form the bulk of his clients.
Sawant’s family moved to Sangli after the tyre factory where his father worked shut down following strikes in 1987-89. It was in Sangli that his father took up farming and where Sawant grew up. “I learnt how to be street smart in Sangli. Rural schools toughen you up," he said.
His family had an early brush with finance: Sawant’s father used to run an informal savings scheme for his co-workers. When the tyre factory shut down, all the participants in the scheme lost their jobs and it collapsed. As the organizer of the scheme (called Bishi in Marathi), Sawant’s father had to foot the bill and it wiped out his savings.
After his schooling in Sangli, Sawant did his Bachelor of Business Administration (BBA) before taking up his first job in the back office of a US-focused wealth manager in Pune. He did not like the work. “The job was mechanical. Initiative was not expected or encouraged," he said.
In 2010, Sawant moved to Sangli and tried his hand at broking, a business that did not work out. He saw clients coming into his office wanting execution only, not advice. Many people wanted to make a fast buck, trading in the equity and commodity markets. Sawant decided to change tack. He completed his CFP certification and began to sell financial planning as a B2B service to distributors in rural Maharashtra. This business came to an end after Sebi enacted the registered investment advisor (RIA) regulations in 2013. Sawant then decided to apply for an investment advisory licence—a corporate one— because he had ambitions of setting up a large business. He founded NS Wealth in 2014.
Over the decade that followed, Sawant saw some ups and downs. Attrition was high. Employees were often under-qualified or lacking in initiative. But he survived these challenges and built a steady practice. Today, Sawant serves around 140 families around Sangli and Pune. Doctors are his niche clients and he also focuses on NRIs. “My clients have a net worth of around ₹30 lakh to ₹4 crore. I don’t focus on the very rich. Many of these rural folk will grow wealthier over time and I want to be there from the start of their careers," he added.
Having lived most of his life in rural Maharashtra, Sawant understands the psychology of small-town folks. “Chit funds and scams thrive in small towns. People mainly invest in real estate without understanding the costs. I asked a client what return he had got on a house that doubled its value in 10 years—the answer I got was 100%. There is no understanding of CAGR," he says. However, Sawant is not satisfied with a traditional RIA practice. “A single RIA can serve maybe 100-150 clients. To expand beyond this, a technology solution needs to be found. I have developed an app—OMS money which creates and executes financial plans. Advice is delivered through automation and virtually over video calls. It is in its early stages. I plan to raise money and scale it up," he says. Today, Sawant’s practice covers assets of around ₹90 crore. This comes to an average portfolio size of ₹64 lakh, far lower than what Mumbai-based RIAs generally manage. However, Sawant sees his clients as tomorrow’s wealth creators and is willing to ‘catch them early.’