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Uploaded byAtul Khanna
Next Advisors
This document discusses creating a technology platform to help independent financial advisors (IFAs) grow their business. It would provide tools like customer relationship management, financial planning, portfolio reporting, order management, and research capabilities. This would save IFAs time and reduce errors while giving them freedom over their business models. It would also benefit investors through need-based advice, access to multiple products anytime, and more efficient servicing. Manufacturers would see higher sales, improved IFA interactions, and lower costs from reducing paper and errors. The overall goal is to create a win-win marketplace for investors, manufacturers, and intermediaries.
Next Advisors
- 3. Take your pick A bend in the road is not the end of the road, unless you fail to make the turn
- 4. Welcome to thenext practices…
- 5. Banks and NDs IFAs High Resources Limited Resources High Costs Low Costs Revenues under pressure
- 6. Cost of errorsand transactions Resources blocked 61% 67% Cost Time
- 7.
- 8. Investments required Technology Knowledge Customer Acquisition
- 9. IFA 3 IFA2 IFA 1 Resources IFA n
- 10. IFA 3 IFA 2 IFA n
- 11. A technology powered platform to enable IFAs grow their business & enhance client experience
- 12. Product agnostic Style neutral Enable IFAs to build business model of their own choice
- 13. To create awin-win market place for investors, manufacturers and intermediaries
- 14. Phases Transaction Platform Product Research Multiple products Training CRM/ Financial Planning Customer Acquisition Portfolio reporting
- 15. Integrated Customer Management Portfolio Periodic Reporting Review Order CRM Management Research Risk Profiling & Financial Planning
- 16.
- 17. Investor benefits Need based advice Multiple 24 X 7 products Efficient Paperless servicing Low error Monitoring rate
- 18. IFA benefits 24 X 7 Ability to charge Time saving fees Low error rate Compliance Productivity Freedom of business model Client loyalty
- 19. IFA benefits 24 X 7 Ability to charge Time saved Zero Credit fees Brand Low error rate Risk Compliance Productivity identity Freedom of business model Client loyalty
- 20. Manufacturer benefits • Higher sales Business • Improved expansion interaction with IFAs • Reduction in paper Cost • Low error rate reduction
Editor's Notes
- #2 “On behalf of Next Advisors, we,Nikhils welcome you all. It is our pleasure to address such an august gathering today. We are privileged that such dignitaries like yourselves have agreed to grace the occasion on our invitation. These days, when you look at most of the media, be it print or electronic, the reports make mutual fund industry look very weak. Let us see.” Change slide.
- #3 Wait for a moment for the audience to grasp. “But wait, what is happening here?” Change slide.
- #4 “Is it apocalypse? Or is it the chicken little shouting? As someone has said, ‘a bend in the road is not the end of the road, unless you fail to make the turn’. At Next Advisors, we believe that present is always full of challenges and the future is full of opportunities. It all depends on what we do. So, welcome to the journey to the next practices in investment advisory.” Change slide.
- #5 So, welcome to the next practices to the next level of growth. Like in any journey, there are always challenges. Change slide.
- #6 There are two broad categories of intermediaries, viz., organisations and IFAs. Whereas organisations like banks and national distributors can mobilise huge resources, their cost structure is high. The IFAs on the other hand have limited resources but lower cost structure. This cost structure is lower compared to the organisations, whereas among IFAs also there is a vast range.The businesses with high cost structure need faster realisation of revenue.Over the last couple of years, the revenue has come under severe pressure in all areas, be it mutual funds, insurance, fixed deposits, IPOs, etc. Many investors are yet not fully ready to sign up another cheque for fees.
- #7 Roughly 67% of the time and 61% of the costs go towards servicing and transaction related issues. Paper related transactions result into many operational issues and “not in good order” transactions
- #8 In the times when the revenues are under pressure, and resources are low, the only answer to sustain one’s practice is growth. But it takes huge investments for that growth to materialiseChange slide
- #9 The IFAs need to invest in 3 areas: Technology, knowledge and customer acquisition. But, as mentioned earlier, the IFAs do not have the resources to invest in a big way. Large part of repeat tasks, e.g. transactions, basic services, preparation of statements and reports, data storage, calculations, etc. will be done with the use of technology. The IFAs must enhance their knowledge to keep up with the changing world. Change slide
- #10 We who come from different backgrounds but have a common goal - investors’ delight
- #11 The entity thus created is Next Advisors, for the IFA and by the IFAChange slide
- #12 Next Advisors is a technology enabled platform that helps IFAs face the challenges mentioned earlier and create large-scale business that will work for the benefit of the investor.We intend partnering with the best technology solution providers and have started with TechProcess for the transaction engine.Change slide
- #13 The platform is product agnostic and will allow the IFAs to offer multiple products to their clients to suit their various requirements. We will be style neutral allowing the IFAs to decide whether they wish to build advisory business or service oriented one, whether they wish to work on commission basis alone or charge fees or do both. The platform is capable of servicing IFAs with large number of clients or fewer. The platform can support business model that will have frequent transactions or fewer. In short, whatever kind of business model one can think of, the platform is capable of supporting. This was largely possible since the promoters have been operating their own businesses in different ways. The IFAs who have started Next Advisors have taken different paths to the same destination – help clients reach their financial goals in life.Change slide
- #14 Next Advisors will become an entity where all the three constituents; viz. investor, IFA and the product providers win. It aims to become a combination of Google and e-bay of financial intermediation.Change slide.
- #15 In first phase, the customer will be able to transact for MF through online mode. Purchases, SIP, switch, redemption etc are supported. In second phase, the IFA will be able to offer financial planning, conduct investment research, increase productivity through Customer Relationship Management etc. In the third phase, IFA will be trained for improving knowledge, offer more products and morphe from customer service to customer acquisition.Change slide
- #16 The view shows how an integrated customer management will be managed through the platform. The advisor will do the financial planning/need analysis of the investor, recommend appropriate products backed by research, enable investor to transact online for multiple products and make available portfolio reports online. The IFA will be freed to carry out periodic review of investors portfolio and use Customer Relationship Management for improved productivity.Change slide
- #17 So, now let us summarise how this proposition would help the industry. And let us start with the most important part of the industry, the investorChange slide
- #18 First of all, the platform enables the IFAs to offer advice based on the investor’s needs as the financial planning and CRM modules get ready. The platform allows multi-products to be offered from single ID, and hence the investor need not go from person to person to buy various products of his requirement. Paperless environment offers numerous benefits apart from being environment friendly. It reduces the error rate and transaction time. Reduction in errors enhances the customer experience. The platform allows efficient and timely monitoring of one’s financial needs, goals, situation, portfolio performance. Investor servicing gets a boost. And, the platform being online, the investor can access at his own convenience.
- #19 24*7 Online presenceUse of best technologyMaximizing revenueValue addition to existing clientsReduced Back office managementCost savingsGlobal PresenceMass selling- Common magazineReduction in back office time, errors, more time for client advisory, acquisition, product researchThis will lead to business growth.But there are many others that offer al the above. How is Next Advisors different from the various solutions available in the market?Change slide
- #20 The biggest differentiators offered by Next Advisors are: brand identity and zero credit risk. This is neither a sub-broker model, nor a direct to clients model. The principal IFA relationship will be maintained since in the RTA records, the ARN of the respective IFA will reflect. Similarly, since the trail and other commission will come directly from the fund account, the IFA does not face the credit risk associated with principal broker.Change slide
- #21 The AMC can leverage the reach offered by this technology – better reach to the IFA community at fraction of costs. Since IFAs’ business expands, the AMCs will be major beneficiaries of this growth. Reduction in paper and errors will lead to enormous cost saving for the industry as a whole.Next Advisors aims to create a win-win market place for investors, manufacturers and intermediariesSince technology is the key, the first employee we have hired is the Chief Technology Officer who has experience of working a company that has created similar products. We now invite AtulKhanna, the CTO, to show you a demonstration of how the present offering works.Change slide
- #22 Thank you nikhils. In first phase, an investor can transact online. Lets see how. This is existing website of an IFA. The client will log in and will be able to click the “Online Invest” button. Once an IFA becomes a Next member, his website will be integrated with online platform. The online platform will be white-labelled to ensure brand identity. The investor has to enter the answer to authenticate himself. The customer can purchase, switch, redeem, invest through SIP etc. He can purchase multiple funds at one go through Shopping Cart. All the funds for which the agreement is signed will be listed. The investor can select the fund as suggested by his advisor and see the fund details. He can also see the min investment amount etc. After clicking on the purchase icon, he can enter the amount and can select the dividend option. He has to enter Captcha for security reasons and then click on “ok” button to accept terms. He is then redirected to bank website. The investor enters the ID and password, enters the comments, his banking password and the grid verification. The bank is debited and the MF account credited at the cut off time. The interaction with registrar happens subsequently. In second phase, the advisor will do the financial planning/need analysis of the investor, recommend appropriate products backed by research, enable investor to transact online for multiple products and make available portfolio reports online. The IFA will be freed to carry out periodic review of investors portfolio and use Customer Relationship Management for improved productivity. After the demonstration, change slide
- #23 Thank you very much for your patient hearing. We seek your blessings and support in making this a grand success. We believe that this proposition will go a long way on the industry having 40 crore happy investors.Let us take feedback from some of the CEOs present here and then the floor is open for questions and answers.Please join us for cocktails and dinner.