I know this is provocative, but when I see portfolios of the Rich and Famous – well not so rich and famous – you may argue, I come to some conclusions.

First of all it is not very difficult to sell to a HNI. The problem is reaching out to them and meeting them – breaking the walls to reach them is tough. “Sophisticated Investor” is how a rich investor is referred to. Not true at all. Look at NSEL – the persons who lost money are those who believed that they were getting 12% p.a. ASSURED return with NO RISK. In a country where SBI was paying about 8%p.a. why would somebody pay 12% if it was REALLY risk free? Gimme a break.

Take the case of Bernie Madoff. He promised (and accrued or paid) 1% per month for at least a decade (or 2?) without a loss. Anybody dealing with equities knows that such a thing does not exist. People looking for consistency, normal return,….etc. and looking for this in equity (or real estate) markets are the gullible lambs being led to the slaughter by the banks and the financial advisors.

Whether it is a debt fund or an equity fund, there will be some fluctuations. In case of a debt fund – what you lose in a credit risk, you make by staying long enough to get the risk premium. You need to understand that if you enjoy Sehwag’s six over third man, you should be ready for him being caught in the slips in a few overs time. ‘Consistency’ in an equity fund is stupid if you seek and a crime if your adviser promises you that. Then of course there are worse products meant for the HNI – Reit, Aif, long short funds – the more complex it is, the easier it is to sell.

How to sell to a HNI?

Call him and say it is exclusive. Only he has been chosen.

Call him to a good hotel. Trident is passe in Mumbai. Go search, you will find.

Just tell him that this is just a thanksgiving meet – and tell him about the 10 M US $ fund that you just closed. The number of zeroes depends on the number of zeroes that are there in the audience’s portfolio.

Give him good food and your visiting card. Tell him you might be launching a new fund in some time, but you have not decided, and the minimum amount is Rs. 1 crore.

That is enough. Make sure that a few investors (or salesmen pretending to be investors) drop hints about the amazing 34% return that they got by dealing with you. Enough.


Make sure that you are seen in sophisticated circles – and you act tough to take money. So you say “actually my books are full, but I will take Rs. 3 crores from you as an exclusive deal”. Make sure that all the charges are reasonable. You can always charge a 2% “set up fee” and call it administrative charges.

Make sure that a few “influencers” are investors in your scheme. When the President of your local club invests in the scheme and talks about it over rummy (or Poker?) he should say “I have invested..it is doing well..but it is not for all”. This creates both the classic problems – greed of getting CONSISTENT returns from equity, and the safety (so no fear)..and of course the feeling that “they are the chosen one”. I met a HNI who has invested 6 crores – Rs. 2 crores for each child and Rs. 1 crore for himself. In the dividend mode — assuming they will get 0.75% per month….in perpetuity.

What should you do?

Depends on whether you are a “sophisticated investor” or not. If you are a bank RM or an adviser – you know what to do, right?


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  1. Sales training getting better and better. It is not just the talk, create a fake environment (7 star hotel, paid artists), pretend everything, mention big deals and media partnership etc., the client is floored. I have seen several live cases where the client liked the pep talk and ego booster so much that he didn’t ask any question on the product and blindly signed.

    Great post. Chuckled many times because faced the similar situation several times.

  2. Actually these things remind me of the scams on the other end of the spectrum. If a home buyer goes to a bank for a 50L loan, he will be made to doubt his own wisdom by making you run around for months. But if a businessman asks for 600 Cr or 2300 Cr loan, bankers will ask for the bank account where the money is to be credited during the 1st meeting. And this will happen on a Sunday afternoon, the next day, banker from some other bank will visit the businessman to force him to take another 1500 Cr loan…LoL

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