The government is in preparations of announcing its financial budget for 2019-20 on 1^st February 2019. This year’s budget is of utmost importance as it is the last one before the general elections. The budget is likely to be presented by the railway and coal minister Piyush Goyal who has been given additional charge of the finance ministry as the Finance Minister Arun Jaitley is on a medical leave.

Since the budget comes at a time when the elections are just a few months away, as has been the convention, only an interim budget should be presented. The Economic Survey too would not be presented. However, the budget is keenly awaited as perhaps this is the last opportunity before the NDA government to make some key announcements before the general elections due by May.

Earlier the budget used to be announced on 28 February but now it has been moved to 1^st of February since last couple of years in order to provide adequate time for all allocations and plans to be made before the start of the fiscal year on 1^st of April. It also helps corporates and institutions prepare according to the changes announced in the budget for the coming financial year.

As advisors, it is important for us that we are aware of the details and changes in the budget and also understand a few important concepts from the budget. So let us refresh our basics regarding the budget.

• Union budget: The Union budget is a statement which shows the estimates of the government's revenue and expenditure for the coming financial year which begins on 1 April and end on 31 March. It is the most comprehensive report of the government’s finances in which revenues from all sources and outlays for all activities are consolidated for a particular financial year. It is important for everyone since it gives an idea of the government’s expenditure on various areas and sectors like n subsidies, infrastructure development, social welfare, etc. The government also defines tax rates, subsidy rates, and new policies in the budget.

• Annual Financial Statement (AFS): This is the most important document in the budget. Under Article 112 of the Constitution, the government has to present a statement of estimated revenue and expenditure for every fiscal. This statement is called the Annual Financial Statement.

• The AFS distinguishes the expenditure on revenue account from the expenditure on other accounts. The Revenue and the Capital sections together, therefore make the Union Budget. This document is divided into three sections – consolidated fund, contingency fund and public account. For each of these funds, the central government is required to present a statement of revenue and expenditure.

• Consolidated fund: The consolidated fund is the most important fund for the government. All the revenue for the government from taxes, public sector units, also the money borrowed and the receipts from loans given out by the government. Basically, all the money that will be received by the government will be moved to the consolidated fund. Any withdrawal from the fund has to be approved by the Parliament.

• Contingency fund: As indicated by the name, the fund is allocated for the purpose of meeting any unforeseen expenditure. The fund is generally a Rs 500 crore fund and is at the disposal of the President. Any expenses incurred from the fund has to be approved by the Parliament subsequently and the amount used is returned to the fund from the consolidated fund.

• Public account: The public account is an account which holds the public money. For example, money for provident fund accounts, money from small savings instrument or from other investments with the government. For the public fund, the government only acts as a banker. The money in public account does not belong to the government and has to be paid back to the people at some point in time. Expenditure from this fund is not required to be approved from the Parliament.

• Revenue Budget: The revenue budget comprises of revenue receipts of the government as well as its expenditure. Revenue receipts are divided into tax and non-tax revenue. Tax revenues constitute taxes like income tax, corporate tax, excise, customs, service and other duties that the Government levies. The non-tax revenue sources include interest on loans, dividend on investments. Broadly, the expenditure which does not result in creation of assets for the Government of India, is treated as revenue expenditure. All grants given to the State Governments/Union Territories and other parties are also treated as revenue expenditure even though some of the grants may be used for creation of capital assets.

• Capital Budget: Capital receipts and capital payments together constitute the Capital Budget. The capital receipts are loans raised by the Government from the public (as market loans), borrowings from the RBI and other parties through the sale of Treasury Bills, the loans received from foreign Governments and bodies, disinvestment receipts and recoveries of loans from State Governments and other parties. Capital payments consist of capital expenditure on acquisition /creation of assets, investments in shares, loans and advances granted by the government.

• Finance Bill: At the time of presentation of the AFS before the Parliament, a Finance Bill is also presented as per the Constitution, detailing the tax proposals in the Budget. It also contains other provisions relating to Budget that could be classified as Money Bill. A Finance Bill is a Money Bill.

• Fiscal Deficit: The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. While calculating the total revenue, borrowings are not included. The government has to borrow money from the public to meet the shortfall by borrowing from the RBI or raising money from the capital markets by issuing different sovereign debt instruments.

• Revenue Deficit: It is the difference between revenue receipts and revenue expenditure. This deficit is the shortfall of the government’s current receipts over current expenditures. Ideally, the revenue deficit should be zero, however, generally that is not the case. The government has to borrow to meets its expenditure.

Sources: www.economictimes.com, www.timesofindia.indiatimes.com, www.indiabudget.gov.in

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Marketing is the life blood of business organisations, which is driven by customers. Marketing is a wide term and it includes all activities which ultimately will result in increasing your brand value and sales. Marketing, thus is not just about advertising or sales but it includes everything from acquisition to maintaining a customer.

The financial advisory / distribution business is one which needs to have a proper marketing plan. It is essential for any advisor to survive and grow in the present competitive market which is fast evolving. As advisors, marketing must be viewed as a must have strategic tool to grow business, and not a nice-to-have frill when you can afford it. If you feel you cannot afford spending much on marketing, perhaps that is exactly what your business needs!

In the financial advisory profession, one has to create a respectful 'image' in the minds of the customers. The customer too should feel that you are a 'premium' advisor who cares and works for them. Starting from client acquisition to client satisfaction, there are immense opportunities for the advisors to engage with the customer and create this brand / image for himself. Effective marketing also gives an opportunity to the advisor to retain, educate and update the client in the rapidly evolving industry. In this article, we are sharing a few essentials, which every advisor must be familiar with:

1. Message: One should be very clear and concise while conveying the idea or information about your product or your practice. The message should be in a format, medium, language, tone and form which is most suitable to your target customer. The message itself should be framed keeping in mind what appeals to the customer.
2. Clarity: You should be well versed with what you are talking about. Information backed by proper data and figures will help you better communicate and convince your clients. Always keep ready information and sales pitch and cases /examples handy when talking to the clients post marketing activity.
3. Storytelling: You can enhance your sales skills by quoting examples or narrating anecdotes of your clients, friends or relatives, who have made enormous returns by investing in mutual funds. Stories always have a better impact than simply reciting statements. However, one would need to be discreet / careful in sharing any confidential information.
4. Timely follow up: After any marketing activity, it is highly recommended that one does a follow up on the same. This will create importance of the message in the customer's mind and would also ensure higher success ratio. In absence of a proper follow up, marketing activities tend to fade away quickly in your customer's mind.
5. Selective: Do not market everything to every client. That would be a foolish strategy. Instead, try to create groups of customers having similar interests /profile and communicate ideas in a targeted manner. Keep a track of what you are marketing to which client. Clients would prefer and respond to communications which are timed / spaced adequately over time and are relevant to them. Do not repeatedly follow up or keep hammering any specific idea to clients.
6. Technology: Thankfully, technology has come to the rescue of the advisor in many ways, including marketing. Automated tools and solutions in CRM and many other modules have made life easy for advisors who are wiling to make use of it. Making technology your partner in marketing is something that every advisor must do to survive and grow in future.
7. Social Media: Having social media and digital presence is ubiquitous – all pervasive in the business today. It is where most of your existing clients are today and it would be wiser for you to use social media effectively to highlight your knowledge, services and also for promotion of new ideas. One has to be careful and alert though in managing social media accounts like Twitter and Facebook. Having a well managed and regularly updated website, is the first step in creating your digital existence.

Apart from the above seven essentials, one also has to ensure that the marketing activities are well directed to achieve something. Here is a list of some of the deliverables or results or benefits which one should aim for in any marketing activity...

• Branding: Creating a superior image / brand about you and your business. Helps create awareness about you and helps you differentiate from others.
• Creating Need: Creating a need /demand for your services and thus creating new clients and/or business opportunities in existing clients. This may include exploring clients for new sales opportunities.
• Communication: Important updates / information to clients on a regular basis to keep him informed. This will include regular operational updates as also business related alerts.
• Education: Helping spread information and awareness to educate clients on products, services, personal finance, etc.
• Seeking Information: Getting feedback /suggestions on your services /offerings or getting data / information from clients needed by you.
• Relationship building: Strengthening relationship with clients by expressing greetings, best wishes, etc. on events, festivals, etc.
• Gratification: Making the client feel happy and to express gratification on your behalf.

Conclusion:
Effective marketing will increasingly become more digital and essential in our industry. There are market forces which will make advisors focus on reducing costs and increasing volumes. On both fronts, effective use of technology will, to a large extent, determine how your business will survive and grow in future. Marketing, especially digital marketing, is slowly finding its way in the core planning equations of your business. The ones who are quick to respond are the ones who are standing in line to success.

About NJ:
We at NJ, are making constant efforts to help you meet your growing and evolving marketing challenges. NJ offers many tools and solutions which can help you do almost all marketing related activities which you can plan in business. Solutions like NJ BizMall, NJ Web Nest, NJ CRM, etc. can help you greatly transform your business. We hope you can explore these services and make full use of same.

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When Indians think about investing, Mutual funds will never come into the investor's mind. The evident choices will be FD, PPF, even LIC, or if the budget is high, Real Estate. It is because we are brought up in a traditional investment vicinity, this is what we have been seeing our parents doing ever since, and we are following suit. Fixed Income Investments are so deeply rooted in an Indian Investor's blood that it can be indeed difficult for the advisor to be able to even talk to a fixed income investor about Mutual Funds. Although, an increasing number of investors are game for exploring the modern methods of investing, yet the category of traditional investors occupy the lion's share of total Indian investors. And concentrating on the modern ones only, means leaving a big business opportunity behind. So, what do we do? How do we target the skeptical ones?

The most crucial step is to convince such investors for a meeting. You must remember that you don't have to get too aggressive or too conservative. You don't have to talk about the investment products with the client right away, since the viewers under question are the suspicious ones. So, you may try to strike the chord with a line like “you know there are so many investment options, which can generate good returns, plus your investment will be safe”. So if he asks you about the options, you can ask him “Let's meet, and we'll discuss”. If in case the first line doesn't work, then you may say something like “Let's meet once, even if you don't want to invest, it'll be nice to have you over a cup of coffee”. Even if the client looks totally disinterested, then too a cup of coffee is worth the try. And once you get the meeting, it's your sales skills that will do the job.

When you get the opportunity to see that client, make sure you have done your homework and researched about the client's background. Do not rush into things, it is very important that you go slowly and enter into the comfort zone of the investor, before breaking the ice. So, to begin with let him do the talking, this will give you a better idea about his priorities and how strong is his conviction for traditional investments. So, you know how deep you need to dig to get business from the client.

If the investor is a naysayer, changing the mindset is a tough job, but isn't impossible. Straight away if you start with reciting the advantages of a mutual fund, it won't help. For the simple reason that the client is not willing to hear about it, he has built a fictional wall which will not let any modern investment product enter. He believes everything that is modern is risky, and he is too happy with the safe and low return yielding fd or ppf of his. So, you need to devise a strategy to break this imaginary wall.

Doctrine of Substitution: This, for the matter of fact, holds true for all kinds of investors. You need to virtually step into the client's shoes and think from his mind. So, if the investor is a typical Savings, FD and PPF investor for short, medium and long term investments respectively, he is definitely not looking forward to hearing about equities. So, you need to give him what he wants.

> For the investor, who is parking his money in savings account, he has two things in head; one, high level of liquidity so he can withdraw the money any time in the future whenever need arises, and two, safety of principal. So, you need to tell the investor about liquid funds. Ask him to invest a small amount like Rs 10,000 for a month. After 30 days, redeem his investment, and show him a comparison of the liquid fund returns with savings account. Explain to him that the liquid fund is a combination of the liquidity of a saving account and returns of a fixed deposit, and there is no threat to the principal amount.

> An investor whose all time favourite is Fixed income investments is not seeking any criticism on his ways of investing. So, now you need to counter the FD or PPF with a debt mutual fund or a bond by carefully choosing your words. You may say, “it's great you have been investing in FD, it is a wonderful product which offers good returns. I also have a product which offers the same safety of principal with slightly better returns. If you have invested a lac in FD, try investing 10,000 in this product too. I am sure you won't be disappointed.” Remember safety of principal is paramount for the investor, so you should restrict yourself to short term debt fund or a fixed maturity plan or a bond, depending upon the investment period he is comfortable with.

Impart knowledge. Share articles, insights from experts, Mutual Funds investment stats in developed countries, news, updates, etc., with the investor on a regular basis. Simple facts printed on a piece of paper will help you weaken the wall gradually. These will develop curiosity in the investor's mind leading to questions. These questions will give you a platform where you can exhibit the various investment products you offer, their advantages and how they are better than their traditional investment counterparts. You need to explain to them the concept of aligning investments with their life goals, that equity is the best product for long term goals and any volatility is neutralized over a long horizons.

These are your hard earned investors, and you need to be careful with them and not introduce them to super high risk products in the initial stages. Once the investor is comfortable with you, and has developed conviction in his new investment, you shall begin with something like SIP in a Balanced Fund. Tell him about it's unique structure, tax benefits, the debt component protecting the principal and the equity component working for growth. Show him the performance charts of a balanced fund over the years.

All advisors have their unique ways of handling traditional only clients, these tips may help you in the process. Because “Sometimes a slow gradual approach does more good than a large gesture” ~ Craig Newmark.

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