In an interview with Yogita Khatri of Myiris.com, Sapna Narang, managing partner, Capital League says India today presents an opportunity for wealth creation, which is usually available only once over several generations.
Capital League is the brainchild of Sapna. She quit a senior position at HSBC`s private clients division in 2003 to start a `boutique` wealth management firm. Sapna is an engineer (electronics & telecom) and after acquiring a masters in business administration (MBA) from FMS, Delhi (‘93) she joined BNP Paribas. She is also a member of MDRT - The premier association of financial professionals with four top of the table (TOT) honors. She has over 10 years of banking experience mainly in the area of wealth management. Her last corporate job was with HSBC where she worked for five years in the Private Clients Division. This division handled the top- most clients of the bank. Having started as one of the pioneering members of this division, Sapna got valuable experience in structuring the growth of Private Clients Division in North India.
> Can you tell us about `Capital League` and its mission & services? What services do you offer?
Capital League is an independent boutique wealth management firm. The firm was set up in 2003 to provide exemplary wealth management services to a handful of informed and discerning clientele. We are a team of seasoned professionals with extensive experience (cumulative 55 woman years across several market cycles) in the banking and financial industry. During the last 7 years, we have grown manifold both as a team and as a business. We take pride in being recognized by our clients and industry peers as a firm with high standards of integrity and ethics. Today we are counted among the top IFAs (independent financial advisors) in the country and enjoy preferred status with most large and respected mutual funds which gives us direct access to fund managers and high quality research.We offer a wide range of products to cater to high net worth families, small and mid size corporates, trusts, etc. It is by design that our client-to-advisor ratio is nearly one-tenth of large service providers enabling us to provide high level of attention to each client.
> What led you to opt for a certified financial planner (CFP) course and to choose a career in financial planning? How long have you been in the profession of financial planning? Tell us about your experience.
Financial planning is an integral part of wealth management. Thus I have been practicing financial planning in some basic form for many years. I decided to do CFP to learn more about financial planning formally and in a structured manner.
> According to you, what key skills are necessary to become a successful financial planner? What is your advice to aspiring financial planners?
Listen carefully to the client. Be client centric. Explain your proposed plan to the client in a manner which the client can comprehend.
> The competition in wealth management has been intense, with a number of small players having plucked in recent years. How do you place yourselves in that league?
Capital League is today counted among the top IFAs in the country. We have built our practice on the strength of our close relationship with our client families.
> Please share with us your view on the several changes that advisors are facing in recent times?
Both SEBI and IRDA have come down sharply on ``incentives structure`` of intermediaries, which has led to mis-selling in some cases. KYD (know your distributor) norms have been introduced. Also, there is talk of introducing entry barriers through stipulation of minimum qualification to be an advisor. In the long term these changes are good as only the serious contenders will stay in the industry. But ideally the regulators should have given a longer time period to the industry participants to put their systems and processes in order (as in the case of U.K & Australia).
> What are the aspects that matter you when selecting funds for your clients? Your top 3 equity fund picks and debt fund picks with key attributes you like in them?
We generate a `white list` based on 3-year returns and volatility of the funds. Also, we keep in mind the robustness and longevity of the equity fund team. From our filtered `white list` we recommend funds based on appropriateness for the client portfolio e.x large-cap or mid-cap bias of the fund, sector exposure. We have been impressed with consistency of performance of HDFC Equity & IDFC Premier Equity.
> In the debt space, with a one year plus horizon, would you recommend income funds, gilt funds or FMPs?
FMPs.
> What is your take on current market situation? What are the key factors that will drive the stock markets in 2011? What is your advice to retail investors now?
We are not concerned by short term market movements. Over the longer time (2-3 years) we feel the Indian economy is on a fast growth track and the stock market would follow the fundamentals of the economy. Our advice to most investors is to stay put. Indian economy is in a structural bull run. Also, the situation in US and Europe has increased the relative attractiveness of Indian markets.
> How often would you suggest reviewing and rebalancing a portfolio?
We review most portfolios on a quarterly basis. Rebalancing is done based on a certain debt/ equity allocation decided for a client. It may be done after a year or sometimes after 2/3 years depending on the market movements.
> Is there anything else you would like to share with our readers?
Wealth creation requires patience and resilience. Don`t swayed by the short term trends. Over the long term the stock market will follow the fundamentals of the economy. India today presents an opportunity for wealth creation, which is usually available only once over several generations.
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