BENGALURU: Stock brokerage startup, Fyers, has diversified into offering direct mutual funds (MFs) on its platform through Fyers Direct. With this diversification, Fyers will compete with the likes of Paytm Money, Paytm’s investment division, along with other startups including Groww, Kuvera, Sqrrl Fintect, among others.
The mutual funds purchased on the Fyers platform will get directly credited to the brokerage firm's demat account, giving investors the convenience of accessing one portfolio across equity and mutual funds, said the company.
Fyers Direct claims to save distributor commissions of up to 1.5% of the total investment per year, through offering direct MFs.
“As a policy, we have kept away from offering any trade-related advice or tips and have always focused on bettering the UI for our customers through tech integrations, innovations and products […] Through Fyers Direct, we want to extend the convenience of a single portfolio view to our discerning customers who can now trade and invest in multiple financial instruments through a single demat account," said Tejas Khoday, co-founder and chief executive officer (CEO), Fyers.
Fyers is a technology-focused stock broking firm, which currently powers around 50,000 customers to trade on its platform across all major Indian exchanges including the NSE, BSE and MCX.
FYERS is not the only trading platform that has diversified into providing direct MFs to their customers. In 2017, Zerodha, one of the largest retail brokers in the country, launched its direct MF platform Coin, which it quickly scaled to ₹1,100 crore in assets under management (AUM), within a year of launch.
According to a recent report on the asset management industry by Boston Consulting Group (BCG) and Association of Mutual Funds in India (AMFI), penetration of asset management products continues to be limited to 7% of Indian households.
Further, investor awareness and penetration of asset management products in beyond 30 cities in India (after top 30 cities), where nearly 90% of Indian households are located continues to be low, according to the report.
Hence, digital firms and startups plan through their investment offerings to tap these middle income households, with ₹3-10 lakh household income, to bring them under the mutual fund ambit.
In the past two years, digital payment firms including PhonePe and MobiKwik introduced MF investments on their platforms.