The situation faced by most IFAs is that while the cost of acquiring and servicing clients is on the rise, the margins are shrinking. Expanding business across geographies is also a challenge for IFAs as it requires resources and infrastructure. Now, MF distributors looking to broaden their reach and shed some of their administrative backlog have something to look forward to.
Companies like iFAST and FundsIndia have launched business-to-customer (B2C) and business-to-business (B2B) platforms which cater to investors and distributors. While the business-to-business (B2B) platforms are meant for IFAs, the business-to-customer (B2C) platforms are meant for investors.
These companies handle the administrative, back office and compliance requirements of investors while the distributors focus on relationship building and planning.
These platforms enter into a revenue sharing agreement with IFAs. Normally 80 per cent of the upfront and trail commission is passed to distributors while the remaining 20 per cent is retained by these platform providers.
Today, we take a more detailed look at mywealthadvisor.in.
One stop solution for all investment needs
Srikanth Meenakshi and C R Chandrasekar, both technology experts from the US, sensed an opportunity in the Indian MF industry. While there were many platforms available for online investment in equities, a similar platform was missing for mutual funds. In 2009, the duo started FundsIndia (www.fundsindia.com), a B2C platform, which offered investments in a host of products like mutual funds, equities, insurance, company fixed deposits and National Pension Scheme (NPS).
In February 2011, they launched a B2B platform called (Mywealthadvisor.in) for IFAs. Currently, around 120 IFAs are using its platform. Earlier, the B2B site operated under FundsIndia banner itself but was later relaunched as Mywealthadvisor to give it a separate identity from the investor platform. Currently, it partners 34 fund houses and 23 banks.
The company expects to break-even in the next three to four months. The platform offers a trigger-option which allows investors and IFAs to specify when they want to enter or exit a fund based on the market levels.
Other features offered are : portfolio on mobile, call centre support, live chat with customer support, trigger facility, financial planning tool, SIP Alert, Portfolio SIP, Flexi-SIP and SIP on ETFs. The company also allows facilitates direct online investments on the IFA’s web site. Finally, it gives the IFAs a comfort that should they wish to cancel their agreement, the company will transfer the entire AUM and clients back.
“We cater to the needs of the IFAs. It’s an end-to-end service for all investment needs. There is no other platform which allows investment across all asset classes. Our whole business plan is to serve investors who are self service oriented and also for those who need the help of IFAs,” claims C R Chandrasekar of FundsIndia.
Every month, the advisors get upfront and trail calculation report. It discloses the range of commission it gets from all product categories.
Chandrasekhar admits that the transaction volume on his B2B platform is still low. So far, Mywealthadvisor has been able to garner around Rs 30 crore AUM from 120 odd IFAs across the country. One reason for this is that they have not so far promoted its B2B platform extensively among distributors. It now plans to organize events and shows across the country.
