Has anyone tried this site. Is it accessible.
To stay away from thumb impression, bank managers and notaries can we use
this website.
Will someone check and let me know
Thanks
Kanchan
----- Original Message -----
From: "Surya Prakash Sharma" <[email protected]>
To: <[email protected]>
Sent: Sunday, August 08, 2010 3:53 PM
Subject: [AI] No-frills mutual fund investing
Hello accessindians,
many of us face difficulties in investing in Mutual funds through
traditional methods. in my view this new online platform may be of some
help in this regard.
No-frills mutual fund investing
businessline sunday, august 8th, 2010
START-UP STORIES
With more than half of its 6,000 registered clients investing actively and
a recent Rs 3-crore fund infusion from a venture capital firm, the
start-up appears to have got past teething troubles.
Vidya Bala
Aarati Krishnan
A no-frills platform for online investing - that's the idea which Srikanth
Meenakshi and C.R. Chandrasekar, both technology professionals from the
US, hit upon when they decided to start a new venture in India. FundsIndia
(www.fundsindia.com), an online portal that allows you to buy and sell
mutual funds, stocks, fixed deposits, and pension schemes is their
brainchild.
A year after its launch, the portal is still perhaps the only online
personal finance service that offers investors a free platform to invest
in mutual funds (Yes, free! As in you pay no fee, load or commission). The
portal doesn't just allow you to buy and sell funds, it goes a step
further by allowing to put your investments on autopilot - through
facilities such as 'Trigger' and 'Value averaging'. Investors often find
their mutual funds tough to monitor, scattered as they are across so many
fund houses. FundsIndia allows you to hold all your funds through a single
account, making your task easier.
With more than half of its 6,000 registered clients investing and a recent
Rs 3-crore fund infusion from a venture capital firm, the start-up appears
to have got past teething troubles. We thought it a good time to catch up
with the founders, to find out what made them take the road less
travelled.
Finding the gap
Having worked with technology-driven financial service firms in the US,
both Srikanth and Chandrasekar could see a huge service gap in the Indian
mutual fund industry. While there were several equity-based trading
platforms,there weren't any mutual fund investing platforms.
All funds charged a 2.25 per cent entry load prior to 2009, and the
partners saw the opportunity to waive that load and offer a no-frills
option to mutual fund investors. It is another matter that the SEBI banned
entry loads on all funds just a couple of days after the launch of
FundsIndia's portal in June 2009. That was the first shot in arm for the
start-up.
There has been no looking back since then. Starting with just 200-300
customers the portal quickly expanded to 1,500 by early 2010. To broaden
its offerings, the venture had to first get all fund houses on board as
channel partners. Did they have trouble there? Preparing the ground in
advance helped.
"We kept some of the fund houses in the loop even before we formed the
company. So, by the time we approached them for channel partnerships, they
knew us well," explains Mr Srikanth. The channel partner hunt has so far
rewarded them with 30 fund house tie-ups, including almost all the big
names.
That's the supply side of the story. But, what about demand for their
service? With no lavish advertising budget, the portal was marketed mainly
through word of mouth and Internet ads. Luckily, for them, existing
customers brought in more clients once they were happy with the service.
While it is one thing to get investors to register, we wondered what they
did to retain clients.
Building trust
"People liked the transparency in sharing information. Whether it was
their folio identity or enabling them to check their own holdings directly
with the fund," says Chandrasekar. "Since we were a start-up, we realised
that people will have trust issues. Therefore, the first thing was to
build trust, and transparency helped us build that," he adds.
FundsIndia also offers various facilities such as allowing multiple family
members to hold and operate a single account besides enabling online
payments and purchases of fixed deposits. These have proved to be the key
differentiators. Other factors also helped.
For one, investors in FundsIndia do not require a compulsory demat account
if they are only transacting in mutual funds and fixed deposits. Secondly,
the portal allows you to manage your funds better by value-added
facilities.
You can set 'triggers' to buy and sell funds, set up value averaging plans
across funds or even buy a basket of funds, based on standing
instructions! Interestingly, some of these strategies such as trigger
options or value averaging are offered by only a few fund houses today. As
FundsIndia replicates these models across schemes, it managed to offer
more value to clients.
The partners sum up their service as a 'free, no-frills mutual fund
platform with zero account opening fee, zero maintenance fee, no
transaction charges or load.'
Their revenue model though, is no different from any other service
provider. An upfront commission and a trail fee received from fund houses,
brokerage for equity transactions and a one-time commission from companies
for corporate deposits are their key sources of revenue.
Tough times
But what's life in a start-up without some turbulence? The two recollect
how they had invested much of their savings to get the business up and
running, leaving out just Rs 5 lakh for advertising and marketing
activity.
The cost of advertising in print was prohibitive and getting quality
people to work with a start-up was not easy either.
Chandrasekhar recollects sleepless nights for the partners in the initial
months, when it was a challenge to infuse capital into the business and
also make sure that there was no slippage in the payroll commitments to
the staff.
Simple pleasures
The twosome, nevertheless, do recollect some lucky breaks. Srikanth talks
of how the partners still get a kick out of seeing their venture featured
in a personal finance magazine.
He also remembers how client registrations simply flooded in, after an
article on their venture appeared in a vernacular newspaper!
And yet, this tech-savvy twosome know that they still have miles to go and
milestone targets to meet, especially after the recent capital infusion
from Inventus Capital Partners, a venture capital firm.
FundsIndia's targets are to break even one year from now; and have 20,000
investors on board by the end of the year. Not easy, but if fortune
favours the brave, this start-up may well make it big!
with best regards,
S. P. Sharma
e-mail: [email protected]
[email protected]
Mobile: 09571246538
Landline: 0141-2341787
Skype: sps.jaipur
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