NJ Group’s Approach to Wealth Management

Niraj Choksi, Co-Founder of NJ Group, was the guest in a webinar organised by PMS Bazaar and hosted by Vikas Sachdeva, Managing Director of Sundaram Alternates Assets, and Arjun Nagaraj Chief Economist and Communications Manager from Sundaram Alternates Assets.

The webinar titled “Wealth Creation Insights from the Length and Breadth of India” was a part of the Sundaram Alternate Series, and focused on Choksi's experience in the financial services sector and NJ Group’s approach to wealth management. Choksi emphasised the importance of investor education, the power of SIPs for long-term wealth creation, and the evolving role of technology in financial services.

Overcoming Initial Challenges

Choksi explained that NJ Group started in 1994 when mutual funds were viewed sceptically following the Harshad Mehta scandal. Investors were hesitant to engage with mutual funds, making it challenging to convince them of their potential for wealth creation. Choksi then explained that he and his team remained committed to educating investors about the benefits of equity funds and SIPs. They persevered despite initial resistance, slowly gaining trust by showcasing the advantages of SIPs for rupee cost averaging and risk mitigation through consistent, small investments.

Scaling Operations and Building Trust

Choksi then explained that by 2003, NJ Group realised the need to expand its reach and established the NJ Wealth platform. This platform enabled them to collaborate with a wider network of financial advisors and distributors, ultimately reaching a larger audience with their message of long-term equity investing and SIPs. Choksi acknowledged that this expansion coincided with a period of significant market growth, which bolstered investor confidence in mutual funds.

Emotional Intelligence and Client Relationships

Choksi highlighted that NJ Group's approach focuses on the emotional aspect of investing. He emphasised the role of financial advisors in guiding clients through market volatility and preventing emotional decisions that can negatively impact their investments. He said that NJ Group empowers its advisors by providing them with technology, research, marketing support, and a streamlined online platform for transactions, allowing them to focus on building strong client relationships.

Empowering Investors through Education

NJ Group launched the Gurukul initiative to promote investor education and instil a sense of commitment among IFAs. This initiative went beyond providing educational materials and emphasised the importance of investing in knowledge.

Addressing Diverse Investor Needs

Choksi acknowledged that investor expectations vary across income groups. While younger investors might be drawn to high-risk products like cryptocurrencies, older investors often prioritise security. Recognising these differences, NJ Group tailors its approach to individual needs. For high-net-worth individuals, personalised services and building trust are paramount.

Embracing Technology

Choksi described how NJ Group leverages technology to enhance client experience and engagement. Integrating with stock exchanges early on facilitated seamless digital transactions, simplifying the investment process for clients. The introduction of asset aggregation helped investors track their investments and obtain consolidated information. Chatbots were also implemented to assist clients with basic inquiries and access to information.

Global Diversification Strategies

While acknowledging the potential benefits of international diversification, Choksi emphasised the strength of the Indian economy and its growth prospects. He suggested that for investors with a substantial portion of their portfolio in Indian equities, diversifying into global markets can offer a hedge against domestic market volatility.

Prioritising Investor Interests

Choksi stressed that investors must always be the top priority for wealth managers. He advocated regular portfolio reviews, personalised advice, and clear communication to foster trust and long-term relationships. He encouraged aspiring financial advisors to focus on the value they bring to clients, emphasising personalised services and the importance of building confidence.

You can know more about Choksi's client-centric approach to wealth management, and the responsible use of technology to empower investors and facilitate long-term wealth creation from the video link appended below.