We Take Our Investors Through One Of Three Journeys: Kunal Bajaj, Head-Wealth Management
In an interview BW Businessworld, Kunal Bajaj, Head - Wealth Management, talks about his journey, wealth management and more
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Tell us about your journey from Clearfunds to its acquisition by MobiKwik. What drove your decision to sell out at this point in time?
I started Clearfunds with a mission to make investing accessible to everyone. The idea was simple - use technology to give our clients the best possible advice, do away with the posh office space, the fancy lunches and the overpaid staff. All of this allowed us to sell mutual funds to our clients at a transparent, flat fee, not a fat fee.
During this period, we were looking for partners that could use the technology platform we had built and scale up our user growth even further. I was introduced to Upasana and Bipin — and the conversation quickly turned from a business partnership to a complete acquisition of Clearfunds. We were impressed with how MobiKwik had grown from to become a leading payments platform with 100 million users, and were completely in sync with their plans to deliver all financial products on a single app.
How do you intend to differentiate your proposition from other digital platforms such as PayTM Money?
Our wealth offering on MobiKwik is simple enough to be appealing to the first time user and yet is sophisticated enough to appeal to the professional investor. We take our investors through one of three journeys — getting them to invest into liquid funds to earn more than their bank savings accounts ("KwikSave"), taking them thorough a goal oriented algorithm to recommend one of over 50 fund schemes that are best suited for their particular savings needs, or let users pick the scheme that they are already familiar with through our search-and-filter module. At all stages, we emphasise clear communication and automate all our processes so make sure that the user experience is best-in-class. Investor education is an important aspect of this and we will be focusing a lot more effort into this over the next year with a view to nudging users into the right behaviours to maintain and generate wealth.
Within Mutual Funds, do you distribute direct or regular plans, and why?
At MobiKwik we've created an open system, that gives you ratings and data on any mutual fund you may be interested in. For no fee. There is no paywall, no service you have to pay for. We believe this information should be available to all, to make the investment decisions that are right for them.
We only sell direct mutual funds on MobiKwik. Regular plans and Direct plans are exactly the same mutual fund, run by the same fund manager, in two flavours – one with commissions for the distributor or broker, and the other with no commission for anyone. The commission saved gets added to investor returns – which means that when you buy a Direct plan, there’s more for you and less for your broker, every single year! Remember, high cost regular funds are the enemy and low cost direct funds are your friend. This is why at MobiKwik, we offer only direct plans, with have no distribution charges, trail fees, commissions or fund management charges — all at no fee. That's our way of giving back to our loyal customers - the MobiKwik way.
What do you think are the chief risks to a business model that mostly advises clients digitally? Considering that Mutual Funds have a 2% penetration in India, do you think India is ready for digital advice, without the support and hand-holding from an advisor?
More than 25 years after the first mutual fund was launched in India, we've still only hit 2% penetration. The industry still largely approaches customers in a physical-touch, paper-based manner via a agent-and distributor network. There is a another way to take investment advice to the masses – by using technology and smartphones to reach as many people as possible and give them access to all the information they need before they make an investment decisions. By reducing all of the investment costs that eat away into our customer's life savings. To give them the best possible investment advice at the lowest possible cost. And make this whole process as easy as buying on Amazon or Flipkart. We think the new India is ready for this.
Lastly, what’s your AUM and monthly SIP throughput as on date? What are some of your business goals for the next twelve months?
Not disclosed due to competitive reasons.