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Launched a
year back, this platform claims to help IFAs scale up their business by cutting
costs and saving time while their clients buy, redeem and switch seamlessly
from the comfort of their home or office.
After
the entry load ban, a group of eight Mumbai-based IFAs came together to form a
company called Next Financial Advisors in March 2010. Since distributors were
not able to find a quick-fix solution to recover their client-acquisition
costs, the group came up with an idea of an online mutual fund investing platform
called Next Advisors. Launched in May 2011, 52 IFAs across 13 locations
subscribe to this platform now.
The
idea behind the birth of this platform was to ensure that distributors’ brand
identity remained intact. Unlike a sub-broker model, the Next Advisors platform
allows distributors to get commissions directly from the fund house. Commissions
are not shared with Next Advisors.
Paperwork
To
enable transactions, distributors have to sign a service level agreement (SLA)
with the AMCs they wish to do business with. IFAs have to initially sign an
agreement with their clients and complete the necessary paperwork like
collecting PAN card number, KYC status and update the same with R&TAs. All subsequent
transactions are paperless. Transactions like purchase, redemption, switch and
SIPs are available. Clients can buy into the existing folios as well. For this,
distributors have to convert the existing offline folios into online mode by
informing R&TAs.
How does this platform work?
A
link is provided on the distributor’s website which takes clients seamlessly to
the Next Advisors platform. The distributor’s identity is maintained throughout
the transaction.
Next
Advisors has tied up with an RBI-approved payment gateway through which all
transactions are facilitated. As of now, only clients can carry out
transactions and not distributors. Advisors have to recommend funds to their
clients and the clients can then transact through the platform.
Next
Advisors is soon planning to introduce a feature wherein distributors can log
in and recommend which funds their clients can buy. The execution of the deal can
be done by clients later so that they do not have to disclose their net banking
passwords to distributors.
The
software also provides fund research, client reports and customer relationship
management (CRM) modules.
The
platform allows clients to reduce cost and time taken for investing. Clients can
get the same day’s NAV if they buy funds before the cut-off period. Next
Advisors helps in setting up SLAs with AMCs. They have facilitated around 1,000
SLAs so far.
The
platform also provides a ‘wrap’ functionality in which distributors can create customised
model portfolios as per a client’s risk profile (an aggressive or conservative
wrap). Once clients log in, the software automatically channelizes money into different
schemes as per the asset allocation.
In
future, Next Advisors is planning expand the capabilities of the platform to
allow transactions in products like company fixed deposits and bonds in the
near future.
Next
Advisors is planning to offer a debit card and SMS facility for executing
transactions for clients who are not comfortable with net banking.
Charges
There’s
an annual subscription fee of Rs 10,000 for the software. For joining this
platform, IFAs have to shell out an extra Rs 5,000 initially for establishing an
SLA and to cover other costs. That means the initial annual cost works out to
Rs 15,000 (first year) and Rs 10,000 for the subsequent years.
Distributors
have to pay a transaction fee which varies from Rs 5 to Rs 20 depending on the
type of transaction. The platform has also built a functionality where distributors
can recover the transaction cost from their clients if they so desire after
reaching an agreement with their clients. .
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