Nanda Kishore Sethuraman recently co-founded PoAncho, a startup operating in the space of financial literacy and wellness. The organisation conducts financial wellness workshops in companies and offers advisory services through parent company Dyota. The aim? To encourage young working professionals to grow their money.
Money, yes; financial literacy, no. A global survey by Standard & Poor’s Financial Services LLC (S&P) reveals that India is home to 17.5 percent of the world’s population but nearly 76 percent of its adult population has no understanding of basic financial concepts.
Marketing planner and financial strategist Nanda Kishore Sethuraman agrees that India is way behind the rest of the world.
“The current state of financial literacy in the country even among working professionals is abysmal,” he says.
Reason enough for him to launch PoAncho, a company that aims to boost financial literacy levels in India.
Nanda, 43, has taken workshops at the biggest corporates in the country, and says that less than 2 percent of the total 8,000 participants he interacted with could answer basic questions on financial literacy correctly.
He explains: “These participants, employed professionals, were making a number of mistakes in managing personal finances due to poor financial literacy. And it is this adult population that will introduce ‘money’ to the future generation.”
Launched in March 2017, PoAncho (an acronym for Positive Anchors) is a financial literacy and advisory company.
When asked about their differentiator, Nanda says:
“There are many robo-advisory applications on the market, but there is no entity that focuses on literacy. This essentially means that all entities focus on carving out a piece from the existing pie. Our model of literacy and advisory helps reach out to ‘new investors’ who are otherwise ‘savers’ and not ‘investors’.”
Nanda, an MBA graduate from IMT Ghaziabad and INSEAD, founded the business with Kaushik Ramachandran, 45, who’s a BITS Pilani and IIM Lucknow graduate. Kaushik is the Chief Financial Planner and drives overall investment strategy for the company.
PoAncho conducts financial wellness workshops and also provides advisory services through its sister concern, Dyota Solutions, which is a SEBI-registered investment advisor. This is because SEBI does not allow literacy and advisory powers to be vested in the same entity.
Under their financial literacy programme, the company ties up with corporate houses and startups to conduct financial wellness workshops as a part of employee engagement practices.
Their client list includes names like Taj Group of Hotels, Nestle, IBM and Infosys, among others. According to the company, these workshops can rake in as much as Rs 2.5 lakh on a monthly basis in revenues.
To enhance the experience of these workshops, the company has also developed a web-based (desktop) game that underlines the concepts of financial savings.
Nanda explains, “The game is a simulation of life in which the user is provided with virtual money. He’s made to pay for mandatory and discretionary spends like vacations, white goods and similar expenses. The user has the option to spend through multiple payment options and buy into multiple financial products through the game. The end objective is to be net positive when the game ends.”
The game is not available on Google PlayStore and can be played only through a link provided.
These financial wellness workshops provide leads for the advisory business.
The consumer facing app, iMoneyPlant, takes care of the advisory side of the business.
On signing up, the app requires individuals to register with the platform, filling in financial details such as PAN, Aadhaar and bank account number along with IFSC codes.
Unlike other platforms, the advisory platform is not goal based, meaning that it doesn’t advise individuals towards a single goal. It is instead based on the concept of short, mid and long-term buckets. This means saving up uniformly for short-term requirements like vacations and long-term necessities like a retirement fund.
The robo-advisor at the backend suggests different financial products based on these parameters. The suggestions keep getting refined as more fields on the platform, such as income, net worth and big expenses, are filled in.
The app is linked to MF Utilites at the backend, offering access to most of funds. MF Utilites is a transaction aggregation portal that allows customers to transact across multiple schemes from different fund houses.
By regulation, SEBI also doesn’t vest an advisory licence and a mutual fund distributor licence with the same firm. This means that the firm which advises cannot sell financial products.
Hence, iMoneyPlant only charges for advisory services, while the transactions are made on MF Utilities.
At present, iMoneyPlant has more than 300 active investors who have made an average investment of Rs 60,000.
Unlike the per-transaction or commission model of wealth management platforms, iMoneyPlant has a slab-based fee model.
Investments up to Rs 50,000 made on the platform are completely free for the investor. From Rs 50,000 to Rs 2 lakh, the investor is charged Rs 50 per month; from Rs 2 lakh to 10 lakh, the fee is Rs 300 per month; from Rs 10 lakh to Rs 10 lakh, the charge is Rs 500 per month; and from Rs 20 lakh to Rs 30 lakh, the platform can charge the investor as much as Rs 1,000 per month.
For comprehensive financial planning, including investment insurances and tax preparation, the firm charges between Rs 3,000 and Rs 10,000 per annum.
The company is at present bootstrapped and looking for external funding.
Speaking about the future, Nanda says: “We are focused on increasing the customer base and aim to reach an asset size of Rs 1,000 crore in the next two years.”
Over the course of this year, a plethora of wealth management and financial advisory platforms have emerged. Kuvera, Zerodha-incubated Balance and ProsperX have recently started operating in this space. Older players like FundsIndia, Scripbox and Zerodha have been functioning for a while now.
However, the wealth management industry is still coming of age as the Indian investor is still to get accustomed to these products.
The influx of players will only help in furthering growth as they help create awareness about investment and wealth management options. Over time, only financial literacy and stability will lead to economic security for families and an efficient economy.