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Fisdom's private wealth foray may provide template for other fintechs

Fisdom is predominantly a distributor of financial products like mutual funds and it shares commission income with its partner banks as referral fees. (iStock)Premium
Fisdom is predominantly a distributor of financial products like mutual funds and it shares commission income with its partner banks as referral fees. (iStock)

  • Fisdom, an investment platform with around 4.5 lakh customers announced its foray into private wealth management on Wednesday. It has hired Abhijit Bhave, formerly CEO at Karvy Private Wealth, to head its wealth management operations.

MUMBAI: Fisdom, an investment platform with around 4.5 lakh customers announced its foray into private wealth management on Wednesday. It has hired Abhijit Bhave, formerly CEO at Karvy Private Wealth, to head its wealth management operations. 

The venture may provide a template to other fintech players in the financial services industry. Many of these platforms have large user bases for their investment apps. Some of these players, such as Paytm Money, have adopted a 'marketplace' model, onboarding advisors on to its platform rather than directly delivering investment advisory services. Other major fintechs in the wealth management space include Kuvera and Groww, both of whom currently offer direct plans of mutual funds and target the mass market. Kuvera recently announced a tie up with Amazon Pay to provide mutual funds and fixed deposits on the latter's platform.

Fisdom has traditionally relied on its partnerships with PSU banks and old generation private banks to drive its customer growth and the company is now targeting the affluent tier 2 and tier 3 customers of these banks. Older customers who are more comfortable with human interface rather than apps are in focus, for this service. Fisdom currently has tie ups with over 12 banks and financial institutions such as Oriental Bank of Commerce, Indian Bank, Karnataka Bank, City Union Bank, Bank of Baroda, UCO, State Bank of Mauritius and Suryoday Small Finance Bank.

"The typical bank branch has around 8,000 customers of which I would say 300 qualify as mass affluent. They would either have a locker or an account balance of more than 50 lakh or an overdraft account, indicators of wealth accumulation and that is the customer base we are targeting," said Subramanya SV, co founder at Fisdom. Fisdom is predominantly a distributor of financial products like mutual funds and it shares commission income with its partner banks as referral fees. This is in contrast to apps like Groww and Kuvera which offer direct plans of mutual funds on their platforms. Direct plans do not feature any distributor commissions. Fisdom has a direct plan variant called Finity which is currently used by a small segment of its customer base.

The private wealth division will offer both regular and direct options to customers, based on their preferences. "In a purely physical or traditional model of wealth management, a relationship manager may handle an AUM of let's say 100 crore. In a phygital model of wealth management like ours, that AUM might be in multiples," said Abhijit Bhave, CEO, Fisdom Private Wealth.

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