Competition in robo advisory will expand the market

Sharad Singh of talks about how his robo advisory platform is popularising direct plans.
By Morningstar |  18-05-18 | 

Sharad Singh, CEO, chats with Ravi Samalad about how robo advisers are reaching the under-penetrated market.

How has been the journey of Invezta so far?

While industries like travel, e-commerce, social media etc. have redefined the usage of technology and evolved the customers’ expectations, the financial services industry has lagged behind over time.

There has been a clear need of players that can cater to individuals’ financial needs with convenience and transparency. A huge population falls in the advice gap, since it has smaller ticket size and can’t be served by existing channels.

We had been passionate about this field and launched Invezta to help individuals get the best products, suited to their financial needs, at the best price and in a transparent manner.

The ecosystem in the investments space has seen a lot of changes in recent past and we found that to be a good opportunity to start with.

Invezta came into existence as the first, zero-commission, full robo-adviser in India, based on direct mutual funds. Since launch, customer focus has been our driving force and we have received very encouraging response over time.

While we have been awarded the best FinTech company award in wealth-tech space by Nasscom, The Federation of Indian Chambers of Commerce and Industry and IBA Banking and Technology. More rewarding is the fact that our customers market us and we have been expanding organically via word-of-mouth. The experience so far is motivating and we are gearing up for further growth.

Besides mutual funds, what other services/products do you offer?

Mutual fund, as a product category, is good enough to cover the investment needs of the customer segment that Invezta caters to. Blended with algorithm driven advice and a powerful goal-based investment platform, completely serves the investment management needs of an individual.

As we go ahead, other financial products that cater to the insurance, credit etc. needs of an individual shall be integrated to give our customers a holistic financial management experience.

The competition among robo advisers offering direct plans is increasing. Paytm also is entering this space. Do you see this as a hindrance to your growth?

Competition in any domain is a validation of the fact that there is a business case. Big brands entering the space shall penetrate the industry faster and reach the unserved part of the population.

Once an individual has been introduced to mutual fund investing, by any player, the investor shall gradually look for the best offering available. With switching costs going down and shifting to another provider becoming seamless, the best product shall win eventually. So that’s an opportunity for the entire industry and we are confident of our product playing out for us.

Many robo advisory platforms are offering similar kind of services. How does Invezta differentiate itself?

As an organization, we have a strong background in investment analytics and our platforms are used by leading fund managers, banks and wealth management companies across the globe. is backed with the same institutional quality analytics, that has been available only to high net worth individuals till now, and we expect that to be a sustained advantage for us.

Secondly, we have a strong intent of being a pro-customer platform. We were the first platform with direct mutual fund investments in an industry working primarily on commissions driven model. As we expand into other products, we shall create business models that shall bring more transparency and innovation in the financial services space.

Thirdly, we are investing in the technology for the long haul. Invezta is one of the few platforms that have their own transaction engine rather than relying on exchanges or MF Utility. We believed that would be key in serving our customers and we are happy that we took that path. We have invested heavily in our operations and customer support systems to ensure that our customers get the best experience and talk about our brand further. We have been the first comprehensive goal-based investing platform with full robo-advisory and we shall continue to innovate further across various touchpoints with our customers.

How do you acquire clients? What marketing strategies do you adopt to get clients?

Keeping our customers happy is our number one marketing strategy. We have been expanding organically through word-of-mouth. Now that we are shifting gears for further growth, we have started deploying dedicated teams for customer acquisition via digital and other channels. Industry is still in nascent stage and we will have to try an array of strategies to see what works the best.

Direct plan investors are more susceptible to redeem during times of volatility. How do you coach/guide them in such situation?

We are a full robo-advisory product where our customers invest for their financial goals. Once an investment is tagged to a goal there is more stickiness of the customer and investment as compared to an untagged investment.

Besides, our robo-advisory engine delivers constant advice to the customer along their investment journey so that their portfolios are always healthy.

Robo-advisory is not just about automated investment advice. Technology plays a key role in managing customers’ behavior across industries. While investment behavior has additional complexity, data sciences & technology are getting better by the day and more capable of nudging the customer in the right way.

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