Whitespaces in wealth advisory space in India

Abstract

Investing in India has historically been an activity of the HNIs while the lower and middle class has been limited to the idea of saving the money in the form of savings account or fixed deposits with banks. ndia witnessed a revolution in the wealth management space around 2017 when Zerodha made investing cheaper and accessible to everyone with their cheap brokerage and account opening charges. However, 6 years have passed but nobody has been able to answer the question of where to invest as the stock universe is too big for a retail investor to study himself. This led to rise of many fintech platforms like Kuvera, IndMoney, etc who have been trying to provide advisory services at affordable prices, but they haven’t really been able to reach the success which Zerodha was able to. The problem of where to invest still persists for investors who want to invest in the market actively but are earning <₹10L, as a flat fee model of ₹10,000 offered by RIAs is ineffective because even with a 10% portfolio return on ₹1.2 L invested yearly, the investor makes a net ~2% return. Currently, most of the investors in this segment quit their search at this point and settle simply for a fixed deposit or a passive mutual fund portfolio, as the risk involved in these instruments is comparatively lower, with assured returns in the long run. Those who venture for investment in the equity market do so by educating themselves through online platforms, earning less than satisfactory returns in the process.