From Director’s Desk | Anirudh Dar
In 2014, when I was starting Plutus, my initial concept note stated that financial services are not only a difficult and complicated space but also a fragmented one. For each financial product, one refers to a large cross-section of players for the fulfilment of their needs. Example:
- For Mutual Funds: Banks, IFAs, NBFCs and now some online platforms
- For Life Insurance: Banks, insurance agents
- For LIC: LIC agents only
- For Motor or Health: respective insurance companies
- For Real Estate: newspapers, property agents and real estate companies
- For Mortgages: individual banks or agents of various banks
- For Filing of Taxes: CAs or employ a firm or do it online
- For Financial Planning: individuals, firms or institutions
Can we see a problem with this above?
Broadly, given the lack of time, knowledge and inclination to learn this subject, a prospective client becomes even wearier when faced with a plethora of choices and the number of individuals or entities advising them on these. This usually leads them to reaching out for the easiest option and falling into the trap of a wrong investment decision. In my last blog, I had stated that a survey conducted by the National Council of Applied Economic Research, showed that 67% of all investors in the country follow an informal advice system which is neither scientific nor grounded in any reality. Financial advice should be several individual tools working in unison to reach a common objective. However, with multiple advisors – each unknown to the other – this cohesion is lost and, often, instead of working together, some tools can work at cross-purposes and whole idea of concise financial advice is defeated.
Let us try and get to the root of the problem here. Advice being unstructured can only be detrimental and harmful to your portfolios for the simple reason that your ‘advisor’ is not looking at your overall need and is interested in addressing or rather focusing on only one aspect of it. Try putting this into perspective. Ask an LIC agent whether a rival product from a private insurance company is worth investing in? Ten out of ten times they will run down the other product. But why target the LIC agent alone. Ask your bank relationship manager if the insurance their competitor sells is better than the one their own bank offers. What do you think will happen here? What do these two examples signify. That, is a non-LIC product lousy? Or, is the product which your current bank does not sell not good enough for you? Is this the kind of advice you really want and deserve? The one that requires competition to be run down.Ask yourself if you can you expect impartial advice from individuals and companies who do not even offer you a full range of competing products because of their vested interests.
At Plutus, we have painstakingly evaluated and partnered with over 200 different product manufactures to bring to our clients, the best, most impartial, objective investment advice that they can get on one single platform. We believe that you, our clients, deserve to be given choices that are necessary for taking informed investment decisions and we will continue to strive to add more product ideas in times to come.
Today we partner with over 30 different mutual fund houses, more than 9 insurance companies offering life, non-life and health insurances, 14 banks offering home and business loans and various real estate companies. We have recently tied up with a leading broking services company for opening of demat accounts as well. Our clients can access their mutual fund investment portfolios online via our website, www.meetplutus.com and also download our mobile apps, both on Android and iOS platforms with the name, Meet Plutus.
We believe that structure in investments begins when advice is comprehensive. We have endeavored to do that from the time we started our operations and in our 7th year, we are just beginning to chip away.