How Centricity is using tech to disrupt the wealth management space

For nearly a decade, Mohit has steadfastly worked as a mutual fund distributor (MFD), tending to a dedicated and discerning clientele in Varanasi. He has a notable presence, but is keen to broaden his clientele and diversify his financial acumen. 

A chorus of financial possibilities extending beyond the realm of mutual funds and encompassing bonds/NCDs, P2P lending, portfolio management services (PMS), and loan against securities, among others, has reached his ears. However, the realisation of these prospects is constrained by the dual limitations of access and the requisite expertise. Mohit isn't alone.

Across Tier II and III cities in India, financial product distributors (FPDs) face similar hurdles. While information about mutual funds flows freely, knowledge about alternative products remains elusive. These FPDs need guidance and training to navigate uncharted waters. They rely on trust, the kind that only a neighbourhood advisor or distributor can build. It's not that customers have a "low-risk appetite"; they simply fear the unfamiliar.

Technology with a human touch

Enter Centricity, a Gurugram-based wealthtech startup on a mission to bridge this knowledge gap. With a "technology-first" approach, Centricity offers a comprehensive platform, OneDigital, a one-stop shop for FPDs to access and distribute a wide array of financial products from over 100 asset management companies (AMCs). The secret sauce? Centricity blends cutting-edge technology with a human touch. The platform's "phygital" approach combines the strengths of technology with a human interface, ensuring that clients receive both, digital convenience and personalised guidance.

In just four months since it started operations in April 2023, Centricity has created a vast network of more than 700 financial product distributors across 12 states and 15 cities, onboarding nearly 2,000 clients.

What's fascinating is that 50% of Centricity's partners are seasoned mutual fund distributors, chartered accountants, LIC agents, and retired bankers who joined through a mix of digital outreach and physical roadshows.

The other half of Centricity's partners comprise former relationship managers, personal bankers, and private bankers. They bring extensive wealth management experience to the table and are determined to build lasting, sustainable relationships based on prudent financial management and tailored product selection.

Centricity's commitment to closing knowledge gaps is evident through its YouTube channels, "Centricity Speaks" and "Centrishala".

The onboarding process for FPDs is seamless and paperless. Partners can onboard clients, conduct transactions, and generate reports digitally. The company aims to onboard 1,000 more partner FPDs, accumulate Rs 5,000 crore of AUM by March 2024, and maintain a monthly SIP book of Rs 10 crore.

Centricity's revenue-sharing model reflects its dedication to partner success. The company shares nearly 70% of its earned commissions with partner FPDs, ensuring a mutually beneficial relationship.

Supply-side issues in financial product distribution

While many financial product distributors struggle to scale their offerings in Tier II, III, and IV cities, Centricity adopts a "phygital" model led by partner distributors. This aims to introduce innovative product ideas like P2P lending and PMS to India’s heartland, reducing the reliance on traditional options like fixed deposits and physical assets.

Addressing pain points for single family offices (SFOs)

Centricity also addresses the needs of SFOs and UHNIs. Surprisingly, the wealthiest individuals find themselves underserved in the digital wealth management landscape. Centricity's second technology platform, INVICTUS, simplifies the investment management process for SFOs. It offers comprehensive insights, investment mandates, multi-product selection, net worth reporting, and performance tracking. The platform's goal is to provide actionable insights, not push products.

Currently, several SFOs with financial portfolios exceeding Rs 100 crore are onboarded on the INVICTUS platform, with relationships managed by experienced portfolio coaches. The company aims to onboard at least 500 families in the next 36 months with a targeted cumulative AUM of Rs 50,000 crore.

Founders with a wealth of experience

At the heart of Centricity's success lies a founding team with a wealth of experience in private wealth management, sales, product development, operations, analytics, and technology. With a collective background that spans renowned financial institutions such as Citibank, Kotak, Standard Chartered Bank, IIFL Wealth, and Deutsche Bank, the team brings a comprehensive understanding of the industry's intricacies.

Leading the way is CEO and Founder Manu Awasthy, with over two decades of experience in private banking. Founding Partners Aditya Shankar, Gaurav Tiwari, Pushpendra Singh, Manish Sharma, Ishkaran Chhabra, Sachin Jasuja, Mandeep Randhawa, having worked as wealth managers and private bankers previously, offer valuable expertise. The founding partners on the technology side – Nikhil Golatkar and Kunal Shrivastav – have tech product experience from previous stints in developing wealthtech solutions for large domestic and foreign wealth management firms.

Business development is spearheaded across North & East India by Faraz Mahmood and for South & Western India by Anirudha Mahanot.

A vision for the future

Unlike its peers in fintech and wealthtech, Centricity has a negligible net burn and has built exceptional traction on client acquisition and revenue generation.

The founding partners began with an initial investment of Rs 3.15 crore. Centricity started with a 17-member team on April 22. In about 17 months, it has scaled to a 132-member team with a presence across 12 states, with a net spend of only 10% of the capital raised. This kind of efficiency is unprecedented in the technology space, where growth plans are usually calibrated around high burn rates.

In September 2022, Centricity raised a pre-seed round of $4 million from a clutch of SFOs like the Burman family office, Shantanu Agarwal, and Arun Jain (Founder, Polaris Software Labs and Intellect Design Arena), Devesh Sachdev (Fusion Microfinance), Rajesh Razdan (Devtron Inc).

The company has ambitious plans for FY24, including expanding business development teams across states, adding tech talent, achieving ISO and ESG compliance, and launching a comprehensive app. It anticipates reaching $2 million in revenue, adding more distributors, and scaling AUM significantly. New initiatives like setting up a support call centre, applying for RIA and broking licences, conducting 200 distributor partner roadshows across states, and offering mortgages for distributors are also on the cards.