FutureAdvisor.co.in for online financial planning

In the online financial planning space, here is FutureAdvisor.co.in. Bootstrapped and co-founded by Ronak and Roopa Hindocha in May 2011, it is a practice management platform for financial advisors to support their clients in advising, planning, reporting, transactions and CRM needs.

Investing online has become the norm for individual investors and traders over the past decade, with many brokers now offering online services over trading platforms. Traditionally, agents used to get commission from companies, but now because of the intervention by market regulator SEBI things have undergone changes.

FutureAdvisor facilitates a comprehensive, advisor approach, in planning cash-flows, saving taxes, generating financial reports, and stock recommendations, making sure that the clients are fully insured in all aspects. FutureAdvisor is a completely white-labeled solution which keeps the advisor’s identity intact and in the forefront. So, no more tedious calculations in Excel…no more copy-pasting data…no more manual updating and sending of reports. On the B2B front the platform complements the skills of the portfolio and wealth managers and aids in jump-starting their practice further.“Earlier the conversations used to revolve around performance of the schemes and then investing. Our portal is attempting to first focus on understanding the life goals of the customers, asset allocation and then investment requirements accordingly. We are trying to change the focus from products to solutions and selling to consulting via online tech platform” says Ronak. This is not a broker-sub broker model and therefore, the advisors are not on the payrolls of the company. They work as independent bodies availing services and using features which fit their needs by paying a yearly subscription fee of Rs 25,000, with an option of paying the amount in two installments if the advisor is willing to try the services first.

The website enables the advisor to create account logins for his clients who can in turn view, update and manage their own account with backend functional support from the company. The clients can key in their financial goals in order to construct the ideal portfolio and thereafter track the status of the plan, reports and recommendations, sorting of policies etc. This saves the advisor lot of time, which he can focus on new client’s acquisition and in turn manage a tax efficient and high returns portfolio. For most part, one can use point & click options to make decisions, accept or reject or modify advice etc. The advisors can create a financial to do list for the clients so that they never miss out on even the most trivial money matter. The company provides on boarding training through one-on-one online demo’s before and after the advisor signs up along with active support while creating financial plans for the first few clients. For security reasons, the data is stored on Amazon web servers on the cloud with periodic backups happening every day.

The portfolio recommendations made by the company, center around key aspects of an investor's financial life. For e.g. if in a certain portfolio, the customer’s tax savings are not maximized, they are recommended products that will help them maximize their tax savings, or the exact insurance he needs based on a concept called “human life value” and suggest additional insurance only if it is required, suggest appropriate savings required etc. Additionally, the platform provides recommendations at asset level as well, for e.g. the recommendations may say that the customer needs to discontinue with the insurance policy if there are cheaper policies available. Similarly, if the portfolio is too skewed towards very risky or less risky assets then recommendations might be to rebalance the same so that the customer can take appropriate risks. “All these things happen through a proprietary algorithm developed by us based on our actual advisory practice, interactions and advice to the customers. To develop this algorithm we have created our own database of all financial products in order to intelligently identify the exact nature of an asset and provide specific advice. We also consider practical aspects like current tax laws, ownership of assets, regulatory restrictions like Lock-ins, penalties, time to goal etc.” says a team member. The customers are sent timely reminders when their premium payment is due or when they have to go to the bank to withdraw their fixed deposit. All this is done to make sure advisors spend time on more critical matters. Regular weekly updates are also sent to the advisors regarding various schemes, market movements, stocks, reports etc.

The main competitors for them are the brokers and advisors who do manual financial planning. The key advantages one can get with online planning are: First, it's a web application which does not make you download any application. Secondly, the advisor and customer can view their accounts 24*7 and take decisions accordingly. Thirdly, because the advisor is no longer selling a product rather consulting on the overall portfolio of the client and essentially providing comprehensive financial planning, he is now in a position to command a fee for the holistic services. Fourthly, at times the algorithm may give an advice to stop paying premiums towards an insurance policy on ethical grounds. So the advisor is given an option to modify the advice on recommendation and then generate the same for the client. The company only recommends to the advisor based on research and studies, and does not impose any financial decision.

“We are a team of 5 technology and financial domain experts and have just started breaking even though we haven’t recovered all our costs yet. But from now on, we will be able to cover our monthly costs. Changing from a B2C model to a B2B one was definitely a wise decision and helped us set up a sustainable model” says Ronak. A lot of advertising is being done on the B2B platforms to market the services. A pan-India campaign for a one-day workshop has recently been initiated in collaboration with a large mutual fund company for its advisors. They have also begun distribution partnerships with people in larger cities for referral marketing.

“It has been extremely challenging to educate the advisors and helping them transition from a distribution led model to a fee based model. A majority of them do not have the skill sets to command a fee. But if we have to grow, we will have to get them on board as well,” says Roopa.

FutureAdvisor's idea is to have 5,000 advisors on board in a time span of 3-4 years. Going forward, it wants to build an online transaction platform, to save paperwork and reduce operational headaches.