Fintso has been advocating the importance of hybrid models through bionic MFD/advisor. Why do you think hybrid models are the future of distribution in India?
India has 90% of the households in India living in Tier 1 and beyond. Today, financial inclusion is accelerating in India with first time investors going beyond bank FDs, and catering to this population, is the primary goal of most financial services manufacturers - be it an AMC, insurance company, corporate FDs or even loan products.
This potential client base requires a “high-touch” initially. One of the reasons being that they want to have a person who is their “bridge-of-trust” to help them take the first few steps. It is not possible for any independent distributor of a financial product to cater to all the needs or have the skill set and knowledge to balance the product basket to cater to these needs. Assisting these entrepreneurs through the use of technology to evaluate, recommend and monitor is essential.
This is why Fintso is focusing on making these entrepreneurs – the Independent Financial Product Providers (IFPPs) become Bionic Advisor. To provide them all the tools necessary to cater to the needs and help fulfill their role as the bridge of trust.
We also believe that the “robo-advisory” model does not work. The need for understanding the unique needs is necessary so that each solution is as unique as the person they are catering to. Using artificial intelligence and machine learning allows people to efficiently use their time and spend more time with their clients and prospects.
In an era of direct online distributors, why do you think individual distributors still have an edge over these online distributors?
Despite the adoption of digital infrastructure and smart phones, the actual adoption of a DIY (do it yourself) model for financial investments remains fairly low.
We attribute low adoption of a digital financial interface to:
- Low financial awareness
- Lack of trust in the source of advice
- High documentation requirements for first-time investors
- Needing discipline in their savings habits
This is where the IFPPs (distributors) play a crucial role. They understand the requirements of the client at a more personal level to offer customized solutions. Robo-advisors (largely depend on a set of algorithms) do not have this “trust” factor and also lack the empathy required for building a portfolio best suited for the client.
Apart from execution of transactions, what kind of digital support should a distributor seek to grow business?
There are 4 crucial aspects that are needed:
- Access to multiple products so that the right product is available. This includes MFs, corporate FD, insurance, direct equity and credit solutions
- Have the ability to evaluate each product and create the portfolio that is needed for a client
- The ability to monitor each client’s portfolio and provide the relevant alerts needed for timely intervention
- Have the means to digitally engage with a client, provide him with real time portfolio updates and reports
Having a system that actively uses artificial intelligence and machine learning to suggest the right course of action is an increasing necessity.
Additionally, using such digital solutions lowers the operational costs of the back and mid offices that entrepreneurs has to maintain.
This is where Fintso drives last mile connectivity by providing all the possible tech and white-labelled support for the scalability of these financial entrepreneurs.
Another key feature necessary would be of course for the digital platform to maintain high security pertaining to sensitive information
There are many platforms which offer digital support to MFDs. Why do you think MFDs should look at Fintso?
We would like to clarify, what Fintso does is to help convert a MFD (who mainly distributes only mutual funds) into a independent financial product distributor.
We believe distribution of a single product is neither good for the clients nor for the entrepreneur. Having a bouquet of products helps in choosing the right solution as well as provide the means to increase the SoW (Share of Wallet) of a client and hence increase and diversify revenue.
Providing the means of upskilling and assistance in choosing from a wider basket is crucial for a MFD to evolve to the next level.
With a core team having deep domain knowledge and the advanced technical solutions that Fintso has to offer, our services can be primarily characterised as Domain + Tech. We leverage deep tech such as big data and analytics that ultimately help an IFPP to deliver the optimal solutions for their clients.
Fintso helps the entrepreneur with the framework – including research and micro-advisory support - that helps them in showing the benefits to their clients. The platform also has the ability to help execute these decisions in a seamless manner and monitor the same on an ongoing basis.
Fintso is not a “software” company – it’s a wealth tech platform that is based on the David-Goliath theory - to enable stand-alone entrepreneurs go head-to-head with the behemoth, organized players in their industry and help them win by putting the tools needed to make them competitive and showcase their innate strengths.
Physical meeting was one of the biggest advantages that distributors have over these online distributors. However, work from home has restricted such meetings to virtual interactions, which may not be as effective as physical meetings. In such a scenario, how can distributors maintain their competitive advantage and continue to grow their business?
Accepting the new normal and easing their clients into it is essential.
There are two aspects: 1) Meeting a new prospect is difficult and 2) Keeping existing clients engaged.
The effect of not meeting actually is an advantage to existing distributors. Clients are seeking more and more from their existing advisors and distributors. They would like more of their needs fulfilled from the person they trust rather than start a new relationship. This means that a single product distributor like an MFD needs to transition to become a IFPP. Do remember, its 4 times easier to increase share of wallet than acquire a new client. Fintso is focused on this aspect fully.
Digitally engaging with clients has a lot of aspects. One of the most crucial is being in constant touch. This can be by giving them mobile app to see their portfolio, having alerts and notifications through various means (email / WhatsApp / SMS / App), timely monthly reports as well as sharing research inputs. Doing all this physically may be very difficult for an individual entrepreneur. Fintso allows all this and most importantly, does all this keeping the entrepreneurs brand and identity intact.
Fintso enables its clients to create a virtual omni-channel for safe and accessible interactions with their investors. With our expertise in the market Fintso’s services its subscribers and their clientele totally engaged.
Fintso strives to make global investing easy and accessible. Can you take us through how Fintso can enable distributors to globalize their clients’ portfolio?
Fintso aims to provide optimise client portfolios. Both diversification and need to access better opportunities, means that having an access to markets beyond India is a necessity. Our “Global Investment” module helps distributors do this. Allowing such global investments, which was early limited to HNIs, in small ticket sizes and giving a seamless digital execution access allows affluent and retail clients to explore a wide range and well suited portfolios.
Fintso has appointed an ex-Wall Street fund manager, as part of their advisory team. Such expertise is helping Fintso curate and create unique baskets that can only be accessed by Fintso subscribers. Each of these has been created to accept small amounts enabling MFDs to start building out their client exposure over a period of time.
Opening up the doors to the international stock market, subscribers of Fintso can provide their clients with a wide range of investment opportunities – which is a part of the promise. To evolve from a single product distributor to becoming an IFPP.
It is important to be abreast of the current happenings across the globe and undertake due research before investing. How would Fintso help distributors here?
Fintso believes that up-skilling and knowledge support is essential. Our tie up with the NSE knowledge Hub platform is an initiative towards helping our subscribers stay up to date with the changing market.
We are also co-creating training programs and education camps for our subscribers and their clients. This tie-up intends to enable and create future-ready IFPPs.
The data driven performance analytics by Fintso for subscribers assists them in identifying specific learning needs as they work towards safeguarding their investors’ interests.
