Hello Dear Rodinhooders,
I request your 5 minutes today to showcase my new launch Invezta.com, which is a low-cost, zero commissions investment platform. (This is not just another investment platform; you should be able to see the difference in 5 minutes.)
I have been working in the finance and technology space through my career, most of that as an entrepreneur; have been a part of Ask Rodinhooders on personal finance, but something pushed me to finally do this which I had been thinking for quite some time.
Sometime in July last year, my father was discussing his investments with me. When I got into the details, he was unpleasantly surprised when I showed him the reality. He said “What the !#@$”.
Wrong products, huge number of funds, hardly any periodic review… My father’s investments were in a mess.
And a good reason for the mess was “profits-over-people” approach of bankers, advisers and agents who sold all kind of non-sense to my father, just to earn commissions.
I don’t intend to paint all intermediaries with the same brush, but the investment space has seen us pained and I want to solve this.
They say: Start a business when you can explain it to your grandma.
My grandparents are no more. So the ball was with my father, who was crying why I can’t have a clean investing experience.
That was it.
The idea, I had been brewing for long, had to take off. I wanted to create a low cost investing platform where investors can invest with peace of mind.
Here was the first construct of what I thought I would make:
- Provide commission free investing that costs less
- Provide advice that’s 100% pro-investor
- No bias, No toxic products
We created a small task force from my existing business and pushed the throttle. Our Knights did lots of night-outs and finally we were there.
After a few months of toiling, on 22nd January 2016, at 10:25 PM, we were ready.
We pushed the mailchimp button to deliver our “We are live” email to our pre-registered users. Invezta.com, the first low-cost robo-advisor in India was live.
Key Pillars of Invezta.com
ZERO COMMISSIONS MUTUAL FUNDS
We started with creating a mutual fund investment platform, through which almost all investing needs for most of the investors can be handled.
To provide low-cost investing, we decided to offer “Direct mutual fund schemes”.
Well, if you are thinking that you are already investing online, directly and your platform is free of cost; you must know that ‘It’s not’.
You pay hidden commissions to the tune of 1.5% per annum. Yes, per annum on your investments.
If your investments are 5 Lakhs (which will keep on growing year on year), you are paying upto Rs.7,500 p.m. on commissions.
On the other hand, “Direct mutual fund schemes” have ZERO commissions. This means that your returns are higher.
QUALITY ADVICE. PAY IF IT WORKS.
Since our revenue model is not dependent on commissions, we are completely objective in our recommendations.
Secondly, we have been worked on various portfolio management products that help institutions in fund management and portfolio evaluation. When the biggest of foreign investors evaluate mutual funds in India, they use these products to do so.
We use the same analytics and technology on publically available data to help normal investors make sound investment decisions.
Thus, we are trying to democratize healthy investing by bringing the high end decision making to a normal investor.
Even at that, we say, an investor pays for the advisory fee component, only if it works. We are the only investment platform/advisor globally to take accountability of our advice.
The graph below (from our home page) shows the value-add that you can get by investing with Invezta. You can be Richer by more than 50%.
Revenue Model
Customers pay a flat fee at Invezta, which is much less than the savings they get by avoiding commissions. There are 2 packages: @79 Rs. p.m. (transactions only for DIY investors) & 109 Rs. p.m. (transactions + advisory in full package).
The above chart showing the value-add is after accounting for fees… 🙂
Post launch
While we expected that we would have to seed the initial investors from our friends and family as the platform would take some time to be noticed, we were pleasantly surprised at the response.
Within 12 hours of us going live, we had people starting to transact on our website. Investment savvy people liked the idea and put it on social media and we started seeing flow of users.
Last few weeks have been hectic in fixing product features, adding new ones, creating support team etc. but the team is loving every bit of it.
We have received many emails applauding the initiative which is very motivating.
The journey has just begun.
I request you to please try Invezta and, if possible, help me with the following:
- Spread the word among your friends
- Help my team present at your office/colleagues/friends and explain how Invezta can benefit them
- Provide any generic/specific feedback on the product (we know we have to improve a lot but pointers would be helpful)
Please feel free to write to me at 3sharad@gmail.com or in the comments here.
asha chaudhry
congrats sharad!
i like how you saw a gap and created a solution!
so… i had to look up robo-advisor to make sure i understood it correctly 🙂
layman question – if you are india’s first “robo-advisor” – wouldn’t that be a challenge to get people onboard. i mean, finance & investing are very personalised things. how do you propose to tackle the perception that the robo-advisor knows the best?!
Sharad Singh
Hi Asha,
Thanks for your comment.
There are 2 parts to the core of Invezta:
1. Low cost: Invezta is commission free and hence low cost
This is the primary benefit. Less cost means more returns, means your money grows faster.
For existing investors or new ones, this’s a big plus and people are signing up for that.
2. Unbiased-Advisory delivered by Robo/algorithms (and not human)
Investors till now have been getting advice from financial planners. Robo-advise competes with them.
All advisory is built into the platform and one can simply select the period one wishes to invest for and the platform suggests the investments. A few clicks and you are done.
Our commission free structure and algorithm based advice brings objectivity in what we recommend.
Having said that, yes, the advisory part of the offering shall take time to establish itself.
To make it convincing to customers, we have provided a pay-if-it-works fee model. So investor’s are charged for advice if our recommendations work.
This is a unique concept and we are the only ones globally who are bringing accountability in the game. This might help us in creating the perception.
I hope this answers your question.
Regards,
Sharad
Alok Rodinhood Kejriwal
Sharad, I filled up the forms etc but got jacked on the “Give us your Bank Details” part
What is the drop rate on that page?
Also, did you / backend not call me because its me (you know) or the process is not in place yet?
Sharad Singh
You are on-the-money Sir.
There is a 30% drop there. Another 15% drop-out happens at the second step, where we find that investors are not KYC compliant. These are regulatory requirements and can’t be avoided.
We are creating a process to help them jump the hurdle. The same shall take some time to emerge, given the bandwidth.
Request you and other readers to point to strategies that can work in such cases.
40%+ of the registered users complete the entire process (including bank details) and get ready for transaction. The ones, out of them, who don’t transact are our primary follow-up targets in the meantime.
BTW, a SEBI committee is working to make this process as easy as an e-com shopping and hopefully, in a few months, this should be a breeze.
Still, within the current regulatory regime, Invezta would be the fastest and easiest platform to invest (2-3 mins to investing) where the next best might need significantly higher time (days in some cases) and paper documents too.
Regards,
Sharad
Gunjan Kejriwal
Hi Sharad !
Congrats on the new venture. The signing up process is difficult. I wanted a simple access to see how the platform works, could have i not simulated it ?
Also,
I would like to understand pay if it works model. It’s like you make a percentage only on profits and the Rs.109 is for unlimited support for the portfolio irrespective of the portfolio type/ size.
Also, Robo-advisory works on algos, does it take only the technical analysis into account or the fundamental analysis too ?
Would love to know. If i have asked any ignorant question kindly point it out and ignore. Pre Novice in this domain.
Thanks
Sharad Singh
Hi Gunjan,
Thanks for your comments.
Please find answers to your questions below:
SignUp: After second form, we have provided a skip option to help people try and check what’s inside and play with sample profiles and investments.
Yes, a simulated video can be helpful and we shall bring it on.
We are a flat fee platform irrespective of the portfolio size. That’s the difference besides the zero-commission thing. All other platforms including banks and aggregators get commission from our investments without us knowing that.
So, Rs. 79 pm for DIY and Rs. 109 for full advisory. The Rs. 30 pm difference is the fee towards advisory and is on pay-if-it-works model. If we are able to recommend you funds that shall do better than the category average, we charge this Rs. 30 else we don’t.
Invezta currently has mutual funds as the only investment type. We have algos/ models to suggest the investors as per their risk profile. It doesn’t delve into fundamentals of stocks but in someway fundamentals of mutual fund schemes.
Do let me know if you still have any queries.
Regards,
Sharad