Leaving a secured and regular paying job and starting your own business in the investment domain is not easy. It needs passion and courage. And many passionate individuals embark on this journey with enthusiasm. But alas! Only a few of them really show the mettle to stand and sustain in this fiercely competitive market and grow beyond a certain respectable AUM.
Why so? What goes wrong? There are many starting troubles in embarking on your journey to be a successful ARN. Getting more customers, setting up operations, statutory aspects, and so on to name a few. Let us dive into more details.
The first and very important step to become an ARN is to register yourself with AMFI and get your ARN code. For this, you need to pass the NISM examination and then apply for an ARN number as an individual or as a company. You need to complete all the required paperwork. Once this is done, you need to register yourself with all the 42 AMCs. It is a very critical step because otherwise, you will not be eligible to earn brokerage from them.
You start your business with some of your known acquaintances. You believe that by meeting people you may be able to grow your business. But wait and think! How many customers you can reach on your own efforts through your friend circle and references?
You will need to do advertisement and marketing so that people will know about your services. You can always start with your own little customer base, but you will need strong marketing support to grow from here. Your challenge is getting new leads.
You know that marketing and reaching customers is important. But the real question is where will you advertise? Print advertisement in Newspapers/magazines is not very cost-effective. In addition to it, you have no clue about the ROI because you will not be able to ascertain which audience you are reaching. Hence, a good alternative looks to be Digital Marketing on the internet. But you are unsure of it as you have no experience with digital marketing. Additionally, you doubt if it will work for your kind of business.
Let us assume that some kind of advertisement worked for you and new leads or potential customers started coming in. Here, you will stumble upon another challenge, converting these leads to customers. The very critical question they would ask is why they should trust their hard-earned money with you after just one phone call.
You are a new startup. Do you have the required expertise and experience? You might have both, but how will you demonstrate it to the new leads?
In Today’s internet world, customers will ask you about your online presence or website. It is becoming more important than your visiting card and brochures. No online presence, no Trust!
Suggesting a mutual fund, buying mutual funds units, or doing redemptions are supposedly the main transactions you will perform. However, your customers will want way more than these transactions. Changing client’s status from NRE to Indian, KYC update, calculation of capital gains tax, report on % growth, and so on.
As your customer base starts growing, you will have hundreds of such requests every day. You need to service them promptly. You will get overloaded with these to such an extent that it will become almost impossible for you to spare time to acquire new customers. And your growth is sealed! You can employ some staff to take care of this. But, it will push your breakeven point further.
In tracking financial transactions, accurate data plays a very important role. However, the data you receive from platforms like Karvy and CAMS will not be very accurate. It will have some or the other discrepancy.
None of the existing software platforms solve this issue by themselves without eating up your bandwidth. These data discrepancies must be communicated to the software vendor so that they can be fixed. Now, this becomes a permanent headache even if you buy a new software platform. You cannot leave even small discrepancies as they lead to confusion, the wrong interpretation, and ultimately loss of trust.
All these starting troubles will not only increase stress but will also restrict your growth. You will not be able to grow beyond an AUM of 40 to 50 Cr. If you want to go on a higher trajectory of growth, something different needs to be done. At ARNBooster, we are here to help you with our ARNBooster Starter kit to make a stronger start. ARNbooster software platform and other services can take your business to the next orbit.
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