How do you get Indians to invest in mutual funds (MFs) when less than 5% of household financial savings is invested in capital markets as a whole? It’s a question that has troubled the Indian MF industry for long. While the industry finds ways to simplify the investment process, the advent of robo advisors, online distribution and advisory platforms is making things easier for savvy internet and mobile phones users. Finozen is the latest online product in this space.
WHAT IS FINOZEN?
This is an app that can be downloaded on to your mobile phone. It aims to be a platform that will offer a basket of schemes, already curated from a long list of MFs and other financial products. But as of now, you can invest in only one scheme, Reliance Liquid Fund-Treasury Plan-Institutional Plan or RLFTP.
Once you download the app, submit your bank account details and an image of your Permanent Account Number (PAN) card, you are good to go, if you are already compliant with the know-your-customer (KYC) norms.
If you are not KYC compliant, you need to upload the image of your PAN card and address proof. Physical verification (known as In-Person Verification in MF parlance) will be done through a video call on computer. Once that is done, you can start investing lumpsum amounts.
The interface is simple and easy to use. Once you login using your username and password, enter the amount you would like to invest (minimum is Rs.100) and the app will direct you to your Net banking website from where you can transfer the money. It also shows you approximately how much your money will grow in one year based on past one-year return.
If you wish to withdraw, just state the amount and the money will reach your bank account. It also tells you the schedule of when your money will reach the bank account depending on time and day of withdrawal.
Additionally, you also get to see details of your past few transactions on Finozen.
Just one scheme is on offer at present. Also, systematic investment plans aren’t allowed yet. The use of this app is limited as even slightly evolved investors would want to holistically plan their portfolio consisting of various products, taking into account their asset allocation. Finozen does neither.
MINT MONEY TAKE
Finozen started off as a robo advisor last year, but since only a few customers took to it, the product transformed itself into a platform that gives an investment experience in MFs. That’s how it intends to ease people into MF investing.
The product may appeal to first-time MF investors, but not to seasoned investors who may want more. Also, many online platforms and robo advisors do this and they offer a wider bouquet of products to choose from.