At a time when new age financial advisory firms woo customers by offering personal finance services for free, there is a fintech player that has launched a premium model in this space, not only for young professionals but also high-end customers. Sousthav Chakrabarty, co-founder and CEO, CapitalQuotient believes money brings commitment.
"If a person comes to advise you for free on how to manage your money, you may feel he or she has some vested interests, which, in most cases, is true. You value the advice more if you pay for it," says Chakrabarty, whose start-up CapitalQuotient provides full stack financial services including mutual funds, asset allocation, tax loss harvesting and stock recommendations.
Founded in 2016, CapitalQuotient charges between Rs 49-300 a month. The Rs 49 plan covers basic 'starter' services, the Rs-149 plan adds financial advice and the Rs 299 plan helps customers in executing the financial plan as well. Under each plan, every individual gets access to an advisor who helps her manage finances keeping in view life goals.
For high-end customers, the advisory fee is based on the amount of money being managed by CapitalQuotient.
How it works
Interestingly, all a client has to do is put her date of birth (DoB) while signing up and a basic financial plan gets ready. "We have an Artificial Intelligence engine, which predicts the kind of financial goals a person might have based on his or her age. This data gets validated over and over again," says Chakrabarty.
The fact that most advisory firms ask for a lot of data discourages customers to get on board. Chakrabarty says the DoB-approach helps CapitalQuotient deal with this challenge.
"We have realised once you see your financial plan, you will be encouraged to share more data. The more data you share, the more complete the plan becomes."
Financial plans on CapitalQuotient are real-time also. Usually, advisors ask their clients to realign their financial plans in a gap of six months or more. But, on CapitalQuotient, one can do it as and when one receives a bonus, spends money on a vacation, starts or closes a systemic investment plan (SIP) etc. "We are the only real-time financial planners in the country," claims Chakrabarty.
Making a difference
Chakrabarty points out that big wealth management firms such as Motilal Oswal and Anand Rathi typically cater to customers with a portfolio of Rs 10 crore and above, while banks cater to customers in the range of Rs 1-10 crore. But, the segment between Rs 10 lakh to 1 crore is left out. "They don't get that many services and they can't afford to have high-end services also. This is where misselling happens the most. In the banking circle, these are called low hanging fruits."
CapitalQuotient wants to protect this 'low-hanging fruit' with personalised attention. "In terms of market size, this segment is 200 times bigger than the existing market size and larger than the value size of Rs 1-100 crore," says Chakrabarty.
Funding and number of clients
CapitalQuotient has raised Rs 5.15 crore so far. Prominent investors include senior executives in Accenture, Marriott International and Ola.
Number of clients under online subscriptions are 4,800 and there are 120 high-end customers.
Revenues and expansion plans
The start-up posted a strong growth in revenues from Rs 30 lakh in FY18 to Rs 1.3 crore in FY19. It sees a revenue target of Rs 8 crore for FY20.
CapitalQuotient hopes to expand its operations in 10-12 Tier-II cities such as Bhopal, Indore, Jabalpur, Udaipur, Jaipur, Lucknow and Chandigarh, etc by FY20.