WealthApp aims to help the middle-income groups and retail investors simplify their financial planning and wealth management process.
At a time when most investment firms reserve their advisory services for the high net worth clients, four investment bankers are emphasising upon the need to lap up various investors — young, first-timers, and the retired segment alike. Their solution — WealthApp.
Started in 2016 by four former Citibank executives Gaurav Dhawan, Sanjay Gowda, Subba Rao, and Mitesh Shah, WealthApp advises retail investors on tax-saving investments and wealth management processes.
WealthApp aims to help the middle-income groups and retail investors simplify their financial planning and wealth management process. The proprietary web application of the company assesses the risk appetite of an individual and recommends tailor-made investment options.
“In India, investment advisory is just for the high net worth individuals (HNIs). A serviced individual needs as much financial advice as much as an HNI. We believe this space is highly neglected and we want to tap it,” says Gaurav.
Of course, the cumulative experience of over 40 years between the founders comes handy in streamlining the Bengaluru-based advisory which has 20 employees.
Currently, WealthApp deals only with mutual fund portfolios “because MFs are very well regulated, it’s not very difficult to understand, and the seed money requirement is very less.”
“That suits the kind of individuals we want to target,” says Dhawan. Going ahead, the company plans to add more investment portfolios such as fixed deposit schemes (FDs) in the near future.
About 9 percent of India’s population invests in equity markets, and less than 2 percent households are exposed to equity. In comparison, US market boasts of assets under management for mutual funds at 70 percent. Even if we take the global average of about 37 percent, India is still far behind in recognising equity markets as a viable investment option. This creates a huge opportunity for the wealth advisories to woo customers.
“Most of this unexposed population resides in the tier II and III towns where people have no access to professional financial advisory,” says Gaurav.
That the smaller cities and towns face data connectivity issues doesn’t deter WealthApp. Gaurav explains that the app is built to use data efficiently. “It’s a light app that works on 2G also,” he explains.
Moreover, WealthApp’s internal survey of a few remote towns in Karnataka revealed that about 80 percent of the population there spend at least 20 percent of their income on smartphones and data usage. Rest is reserved for household expenses and cash savings.
“People there are actually very tech savvy, largely on mobile phones. And contrary to our belief they have a decent appetite for investment. But most invest in shady chit funds since they have no one to guide them,” says Gaurav.
WealthApp analyses an individual’s risk appetite, need to take risk and tolerance for risk based on factors such as income, assets, savings, weather conditions and political situations.
After an investment is made, the app tracks and monitors the complete cycle, alerting and suggesting investors on due payment, or any change in rules. It also updates users over the need for liquid cash and provides options to obtain it.
WealthApp is currently developing its Artificial Intelligence capability to make the platform more predictive. With AI, WealthApp can throw predictive suggestions for the investors based on geo-political conditions that may affect an individual’s investment.
Currently, WealthApp’s user interface is English. The startup also plans to go vernacular, primarily to target the smaller towns and cities. The project is still underway, and the company expects to go live with it by 2018.
WealthApp competes with other wealth advisory tech firms such as Scripbox, Tauro Investment Advisors, Goalwise, and WealthTrust. These fintech startups are already using artificial intelligence and advanced algorithms to advise retail investors on investment options.
WealthApp also raised about USD 440,000 in seed funding in December. The startup’s investors include NuVentures managing partner Venk Krishnan and Daksh eServices co-founder MJ Aravind.