Arthayantra, which delivers online financial planning services to middle income professionals has 64,000 users across India, some of them from the remotest corner of India. Nitin Vyakaranam, CEO, ArthaYantra talks to Cafemutual about the future of Robo Advisors in India, the challenges faced by traditional advisors and more.
Financial planning aims to provide customized solution which depends on the unique needs/situation of a client. How do you ensure that your online advice is as good as the advice offered by flesh and blood advisors?
Robo Advisor relies on sophisticated algorithms to create financial advice. Every customer is different; they have their own requirements that need to be understood and advised on. We feel Robo Advisor is in a better position to deliver it because it does not have any biases and can deliver best in class irrespective of what they earn. We feel a common man can get world class advice and best practices at a click of the button.
How can algorithms replace human judgment?
We are not trying to replace existing advisors. We are trying to reach middle income professionals who do not have access to advice.
Clients themselves may give you inaccurate information or have a faulty assessment of their risk/goals. How do you overcome this challenge?
This problem is same for both online and offline. In online however we have seen that the customers act faster and get the desired output quicker.
Not all investors are tech savvy and may not be comfortable in dealing online. Are you targeting a particular segment of clients (youth) to your platform?
The best part of being an ArthaYantra client is that the client need not be tech savvy. Anybody who has average experience of Internet browsing will be able to use our services effortlessly. Being an online platform, we have targeted the ever growing internet users in the country, which is one of the fastest growing in the world. We want to reach out to the common man of India, who has been left behind in the race. We have been able to break this barrier decisively. We have clients from the remotest parts of the country, places where it is impossible for them to even think of Wealth Management grade financial advice.
How do you ensure that your client data remains secure?
We use 128 bit encryption, the same level security that banks use. Client data is encrypted and not accessed by anyone other than the client himself.
What are the charges/fee to use your platform?
Currently, we have three paid services, i.e. Basic, Elite & Elite Plus. We charge 499 for Basic, 4,999 for Elite and 9,999 for the premium Elite Plus service.
How many users/clients do you have currently?
We have currently 64,000 users.
Can Robo Advisors be a threat to traditional advisors?
We do not think Robo Advisors can be a threat to the traditional advisors. We want to create and nurture an eco-system where both traditional and Robo Advisors can work together and thrive, leveraging each others’ strengths. For example, traditional advisors can work with Robo Advisors to use their online reach and increase their scope of service delivery. Like-wise, Robo Advisors can work with traditional advisors drawing from their rich experience of the markets, clients’ expectations, etc. The important aspect of what we do is to expand the base.
In global markets, Robo Advisors are competing with traditional advisors on the price front. How is your service different from traditional advisors? What are you offering to your clients?
What we have done with our online platform, Arthos is that we have created an eco-system where financial advice is standardized. Being an algorithm driven model of service delivery, we have effectively removed the human bias from the entire advisory service. Our clients love us for this.
How can advisors use your platform?
We engage with traditional advisors in various models.
Globally, Robo Advisors manage huge assets under management. How do you see the growth of Robo Advisory industry in India?
We feel for a country as diverse as India, Robo Advisory industry is the only way to scale and reach the 125 million middle income professionals, also called as common man. Traditional advisors would find it difficult to scale and meet the ever growing needs and expectations of the middle class. This large under-served segment of the society would benefit immensely from Robo Advisors.
