How WealthDesk’s Unified Wealth Interface can become a game changer for the asset, wealth and broking ecosystem
The Mumbai-based startup’s Unified Wealth Interface (UWI) is an internet-scale interface that seamlessly connects research, product manufacturing, productisation, and distribution at scale.
WealthDesk’s Unified Wealth Interface (UWI) has the potential to revolutionise the wealth management ecosystem. The emergence of such a secured interface – backed by SEBI registered professionals who help investors create a diversified combination of assets – is crucial now more than ever as India’s brokerage industry is witnessing a steady rise in trading activity with trading volumes reaching a record high.
Trading activity in India is booming with an aggregate turnover up to 179 percent YoY in nine months in FY22, according to domestic ratings agency ICRA. With a significant increase in retail participation, the total number of Demat accounts increased to 806 lakh in December 2021 from 551 lakh in March 2021. With a 28-33 percent YoY growth, the Indian brokerage industry is likely to achieve total revenue of Rs 27,000-28,000 crore in FY22.
Currently, there are around 95 million Demat accounts in the country – indicating a strong demand for a solution like UWI. In contrast to the number of Demat accounts in India, there are only 1,300 Registered Investment Advisors (RIA) in the country, which means only one RIA is available for 71,000 investors.
Bridging the gaps
For years, wealth management products like Portfolio Management Services (PMS) and Alternate Investment Funds (AIF) were unavailable to retail investors due to the large minimum ticket size investment requirement. This created a huge gap between retailers’ needs and offered solutions.
While retailers wanted innovative wealth solutions and ease of investing through technology, the retail wealth management market was providing them with fragmented and multi-stop journeys. As a result, mutual fund schemes offered by AMCs (Asset Management Company) were becoming larger but the right packaging of wealth solutions on these products for retail investors was missing.
To address this need, Ujjwal Jain, Founder and CEO, WealthDesk released a whitepaper that highlighted how Unified Wealth Interface (UWI) can democratise wealth creation and is aiming beyond just bridging the gap between retailers’ desires and existing solutions.
“We have built UWI as an internet-scale interface to not only bridge the prevailing gaps but also to elevate the entire ecosystem. UWI enables investment manufacturers to create innovative multi-asset investment products, package them into WealthBaskets, and then distribute them at scale through an ever-expanding list of more than 100 UWI partners in a low-cost, seamless, and efficient manner. We are excited by the possibilities UWI offers to every stakeholder of the asset, wealth, and broking ecosystem,” added Ujjwal.
The gap, the bridge, and the road ahead
In the current ecosystem, the interaction between investors and players is either limited or can even be null. These existing asymmetries and lack of communication result in service and product-related gaps. Something that the UWI can address, acting as a universal enabler that can create an integrated ecosystem which allows all stakeholders to interact with each other, integrate service offerings, and provide a holistic experience to the investors.
Built on open architecture, UWI lets relevant stakeholders including investment managers, brokers, and content providers see through all parts of the architecture without constraints, and make necessary additions that can easily be installed by the end user. Because of this, stakeholders need not independently build the technology stack and simply meet their technological requirements through UWI’s plug-and-play solutions. Powered by interoperability, UWI allows all disparate players in the ecosystem to communicate with each other, identify needs and opportunities – and then design the service and product offering accordingly.
By allowing investors to easily connect with their preferred broker account to execute trades, UWI ensures the investment journey is seamless, efficient, and time-sensitive. According to the whitepaper, UWI will take care of the wealth management needs of the large swathes of investors who will enter the investment landscape in the coming decades – investors whose expectations are shaped by their interactions with digital technology. At an overarching level, UWI would democratise the investment value chain, support product-side innovation, enhance access to premium investment products, and enable distribution at the internet scale – elevating the entire asset, wealth and broking ecosystem.
UWI’s impact on asset, wealth, and broking industry
The whitepaper highlighted that along with bringing in interoperability through a robust technology layer to bridge these gaps effectively and enabling unhindered product innovation, UWI can also seamlessly connect research, product manufacturing, productisation, and distribution at scale. The WealthDesk platform can assist in portfolio management and distribution, along with providing regulatory technology, marketing, and execution support.
This will let WealthBasket managers completely focus on creating innovative multi-asset investment products, without worrying about how to package and sell the offerings. Then, WealthBaskets can be seamlessly distributed to both online and offline investors by leveraging existing distribution networks of brokers, distributors, and RMs with the additional network effects on UWI.
Due to these holistic offerings, retail investors can easily invest in premium wealth creation products on top of broking and other transaction platforms in a cost-effective manner. The whitepaper also further provided an overview of the current investment landscape and underscored the prevailing gaps in the asset, wealth, and broking ecosystem.