This financial advisory firm is changing mindsets towards stock investment

19th Feb 2018
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Intellistocks provides advisory services to clients to invest in financial products. Its core product, Intelliportfolio, claims to be a long-term investment plan, and provides consistent returns irrespective of marco issues affecting the market.

At a glance

Startup: Intellistocks

Founders: Nalini Jindal and Pankajj Nijhawan

Year it was founded: 2013

Where is it based: NCR (Gurugram)

The problem it solves: Helps investors choose the right financial products

Sector: Finance

Funding raised: Bootstrapped

“To begin with, we had to work to change the mindset of the people who invest in stocks. In our early days, we came across investors who had a mindset that investing in the stock market is equivalent to gambling,” says Nalini Jindal, Co-founder and Chief Investment Officer of Intellistocks.

This was among the many challenges Nalini faced while setting up financial advisory firm Intellistocks in Gurugram. The company helps clients invest in mutual funds, fixed income, stocks, and real estate by providing in-depth knowledge about companies, industries, markets and world economies. It offers customised simple and comprehensive financial plans.

Nalini Jindal

The company’s core product, Intelliportfolio, is a diversified stocks portfolio, and offers a long-term investment plan. With a strong safety margin to sustain macro issues, like slowing economy or high inflation, the product claims it would still provide consistent returns in any market.

When Nalini and Pankajj started out in 2013, she recalls, people could not relate to the idea of intelligent investing which could give them optimum returns. People tended to take free advice from friends, family and colleagues and the concept of paying for a professional advisory service for investments in the stock market was new to them.

It took time, hard work, and lot of persistence to change people’s mindset, she recalls.

The firm advises clients on regular basis and supports them with guided entry/exit and periodical review. However, the platform doesn’t invest for the clients. Intellistocks, which started its journey with two clients, has served over 1,800 clients across the globe so far.

Says Nalini: “To know about our product and services, you will have to imagine a platter full of different mouth-watering dishes. Each will have its own flavour suited to an individual’s taste buds. So, we have different services and solutions designed and crafted as per the individual’s requirement.”

Catering from retail to high networth individuals, the company claims to have services for all, and its financial plans are designed to motivate people to enter the stock market, gain experience and bag efficient returns.

Product portfolio

In terms of product portfolio, the firm has an innovative business model: Research the Past, Analyse the Present and Invest in Future.

Intellistocks looks at companies’ past performance, management track record, and credibility. To analyse present companies, the firm looks at how it is currently doing, and in case of any roadblocks, how is it overcoming the situation.

It also scrutinises how it is performing compared with peers and the overall global industry overall. The firm claims to help clients invest in future, on the basis of outlook for the global and national economics, geopolitical situations, markets, and the industry in which the company is functioning.

It analyses whether the client is in a position to capitalise on any opportunity which is emerging, or handle the headwinds which a company might face in the next few quarters. Then it assesses whether this future outlook is already priced in or not in the share prices, and whether an investor can get a substantial margin of safety.

“Once we are positive about all the findings, we invest. While selecting any stock, the firm claims to look at parameters like management quality, business, valuation models, and size and momentum,” adds Nalini.

The back story

Both Pankajj and Nalini were investors in the stock market, and understood the hurdles of getting accurate and reliable advice that helped in better wealth management. The market, they found, lacked focused products to understand and guide millions of demat account holders and investors.

This accelerated their dream to develop a product that empowered an investor.

Over the years, Intellistocks claims to have become a platform to provide precise and reliable advice in the areas of stock market trading.

With a decade of experience spanning across capital markets and various financial sectors, Nalini heads the research team at Intellistocks. During her stint with S&P Global Market Intelligence for over eight years at different levels, she managed multiple teams to drive successful initiatives, is a SEBI-certified investment adviser, and holds an MBA from ICFAI. Co-Founder Pankajj is the Chief Client Officer and spends most of his time listening to customers and incorporating their feedback into the services.

An MBA by qualification, Pankajj has served Johnsons, Tyco and Incredible Ideas. Saloni Jindal is the Operations Head and has worked with S&P Global Market Intelligence as a Quality Analyst.

The dos and don’ts in stock investments

Stock market, which is highly volatile, is often considered to be risky by investors. While interacting with Nalini, I asked her to quickly highlight a couple of common mistakes and right things that clients should do to get profitable returns.

Common mistakes:

  • Most ‘Do it Yourself’ investors invest on basis of their gut feel/hearsay or because of their perception of the brand. They don't study, or at times don't spend any time to find out the financials or fundamentals of the Company.
  • Most of us don't allocate our finances properly, and make major blunders either by investing a large chunk of the money in one stock, or one particular sector or asset class. (Proper diversification is one of the key of success as well as risk management)

The right ingredients:

  • Most retail investors are long-term investors and they keep holding the stock for long-term, which by virtue of organic growth does provide profits
  • Majority of long-term retail investors either invest in blue-chip stocks or dividend companies, which are relatively safe and give consistent returns in long run (though the returns might not be phenomenal)

Understanding the stock advisory market

According to an IBEF report, the mutual fund industry in India has seen rapid growth in assets under management (AUM) and the total AUM of the industry increased 40 percent year-on-year to hit a record Rs 23 lakh crore ($358.78 billion) as of November 2017.

The research revealed the number of mutual fund equity portfolios reached a record high of 46.63 million, of which 7.6 million portfolios were added in 2017 until November. The report highlighted that with the rise in investments in mutual funds and other financial instruments, the revenues of the brokerage industry in India are forecasted to grow by 15-20 percent to reach Rs 18,000 crore to Rs 19,000 crore ($2.80 billion-$2.96 billion) in FY2017-18, backed by healthy volumes and a rise in the share of the cash segment.

In terms of competition, the market has established players like Bajaj Capital, Kotak Private Equity; emerging players like River Bridge Investment Advisors, Go4Advisory; as well as early-stage companies like GoalWise, and Wixifi, among others.

While competition in any sector is among the utmost worries for startups to create a niche, Intellistocks seems to welcome competition with open arms. Nalini feels competition is healthy; and sees it as an opportunity to thrive for the best.

However, the company is betting on its risk management strategies to stand out of the rest.

“We always primarily focus on risk management and risk vs reward. We first asses risk in each and every position we take on various parameters which are very detailed and meticulous but not limited to current technical scenarios, past performance, present and our assessment of macro and micro situation of the market, the sector and the company,” she adds.

Future Plans

Backed by 38-member team, the company has not raised any funding yet, but is actively in discussion with a few large investors. In terms of monetisation, the company is a fee only investment advisory, and advises clients in stocks, MFs and fixed income products.

It has different fee plans for various products comprising of fix and variables. Being fee-only advisers, the platform advises clients only for direct mutual funds which are commission-free, and reveals the fee starts as low as 0.75 percent per annum of asset value.

“Our clients’ investment in equity, mutual funds and fixed income is anticipated to be Rs 300+ crore, of which 30 percent would be in stocks and 70 percent in other asset classes,” reveals Nalini.

Currently, Intellistocks, caters to over 1800 clients, and aims to acquire 10,000 customers by 2020. It aspires to be the catalyst in achieving the financial goals for the 10,000 investors. The brand’s equity strategies and recommendations are structured to deliver a long-term, sustainable growth to clients. Going ahead, the firm is also planning to use more technology, make the platform more user-friendly and seamless for clients.

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