Mumbai: Full Service Broker Those who have been steadily losing market share to discount brokers over the years have found a new way to revive their fortunes. A large number of such broking houses have started advisory services through affiliated arms on fintech platforms like Smallcase.
Medium-sized brokerages such as Motilal Oswal as well as smaller organizations specializing in equity research such as Prabhudas Lilladher, Emkay Global and Philip Capital have launched advisory services on Smallcase. These services have been launched under SEBI’s Registered Investment Advisor (RIA) license in which a portfolio is managed by the RIA for a fee.
“If you look at the size of the investor base that sits between ₹50 lakh limit for PMS and ₹5,000-10,000 Typical investment size for mutual funds, the opportunity is huge. We launched our advisory services on Smallcase two months ago, primarily with asset allocation portfolios. We aim to roll out equity strategies in the next few months,” said Siddhartha Vora, Head Investment Research and Product Strategy, Prabhudas Lilladher. According to Vora, the fintech platform is a platform for advisors and research houses to reach out to new retail. Big market giveaways and millennial investors.
Vikas Sachdeva, CEO, Emkay Investment Managers Ltd agreed. “Emkay Wealth Advisors Limited has launched two portfolios so far – India Manufacturing and India Services. We have a minimum ticket size ₹5 lakhs. Broadly speaking, we will keep portfolio cost at around 2% over the long term. Investors can subscribe to our portfolio and execute through a broker of their choice. Huh. At the moment we have only one portfolio consisting of 10-15 stocks – Philip Champion Portfolio. We charge a similar fee on this ₹12,000 per annum,” said Nishit Shah, Fund Manager, Philip Capital India Pvt Ltd.
The fintech route for investment is not without its disadvantages. According to Vora, the absence of fractional shares in India means that it is not possible to maintain a SIP of a fixed amount in a basket of shares, unlike mutual funds. worth a certain basket ₹may cost 10,000 ₹9,999 or ₹Due to volatility in 10,111 stocks and it is not possible to invest properly ₹Get 10,000 more proportionate shares, he noted. Also, clients sometimes miss out on portfolio rebalancing for which they have to consent online, he said. Conversely in mutual funds, rebalancing can be done by the fund manager every time without requiring the consent of the investors. However, despite these issues, the brokerage sees a huge untapped opportunity to add clients to the advisory side. They point out that the satisfaction of holding stocks directly in your demat account instead of mutual funds is an added advantage.
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