- The financial services marketplace is getting reshaped by three forces – a push to financialization, increasingly complex products, and digitization leading to the emergence of self-serve customers
- Consequently, there is a need for providing cost-effective research and guidance to a new class of consumers
- PrimeInvestor with its totally independent setup and a remarkable team, seeks to do that as a subscription-based, product-first, digital-channel service.
- It’s a unique service – so, we need a lot of feedback, and a lot of support 🙂
When we launched the alpha version of our service a few days ago, there were a lot of people who came to us with a simple question – “What is PrimeInvestor?”
What is this service? What do we plan to offer? How is it different from what this team was doing previously? How can we use it?
So, I thought I would write a brief essay on this topic. However, when I thought about it, I decided the best way to answer this question is by answering a different question:
Why PrimeInvestor?
Why did we create this service? What motivated us? Why do we think this service is needed in the market? In short, why should PrimeInvestor exist?
What we see
The team that is behind PrimeInvestor has several decades of experience in the personal finance marketplace in India. We have looked at the spectrum of products, worked with people and companies in the industry as well as the government, and interacted with thousands of investors over a course of more than 2 decades. Collectively, we see three patterns emerging in the market:
- Increasing financialization of investments
- Increasing variety and complexity of financial products that are available, and
- Increasing trend towards do-it-yourself (DIY) style of management of one’s finances
The trend of increasing product variety and complexity seeks to tap the opportunities available due to this financialization. Private entities, as well as the government, are creating newer, different products that require analysis, scrutiny, and understanding.
People who have been observing the personal finance marketplace will see little reason to argue with any of these points. There is data (from RBI) that substantiates the first point – that people are moving from traditional asset classes such as real estate and gold towards financial assets such as deposits, mutual funds, stocks, and, to an extent, insurance-based products.
The trend of increasing product variety and complexity seeks to tap the opportunities available due to this financialization. Private entities, as well as the government, are creating newer, different products that require analysis, scrutiny, and understanding.
And, finally, more investors are taking to a do-it-yourself mode of investing. This is enabled by two factors – one, the increased availability of digital platforms and services are emboldening investors to go ahead with trying their hand at managing their own finances. And two, regulators such as SEBI and IRDA are incentivizing self-management by making it more cost-effective (direct plans in mutual funds, online plans in insurance are two examples).
And the problem is?
Separately, each of these could be seen to be a good thing. However, put together, you have a situation where,
More and more people are investing in a higher variety of complex financial products with little or no help.
That is a recipe for trouble. Here are the dangers of this situation:
- People move into DIY investing for the cost benefit, and get stuck in bad products because they find it hard to separate good products from bad.
- They are prone to behavioural biases – getting nervous in down markets, not knowing when to act and when not to – resulting in either over-management or getting exasperated with their investments.
- They take ad-hoc advice from a variety of sources – media, friends, family, blogs – in an arbitrary manner and get lost in the process.
4. They do not have the time, energy, or knowledge to continue to keep up with the markets and emerging product trends, and either lose out on opportunities, or worse, let their investments get stale.
5. They miss investment opportunities or good products because they get overwhelmed with the choices in front of them.
Beyond this, there are also people who have taken guidance from relationship managers and financial sales people – investors who, even if they are not DIY folks, are in trouble and need a way out of the mess they may have got into.
So, what’s the solution?
Simply put, for financial consumers to have access to a service that is
- Structurally and organically independent and unbiased
- Powered by people who are experts and have lots of experience with both financial and real-world products and services and understand customers, and
- One that is easily and reliably available in a cost-effective way.
And, that is PrimeInvestor!
We have no allegiance but to our customers – we will not take commissions or ad revenue or any such source of income from any financial product manufacturer. We will not sell, rent, or lease our customer base to any external entities for marketing or any other purpose. Our only source of revenue will be the (low) subscription fee we intend to charge from our subscribers.
We will provide pr
oducts and solutions and opinions (more on these below) created by some of the most trusted experts in the financial world in India (check out our ‘Team’ page) – people with decades of experience looking into products, analysing markets, evaluating the economy, and most importantly, engaging with and interacting with thousands of customers about their financial needs and aspirations.
And finally, we will make it available through an easy-to-use, convenient platform that can disseminate our efforts far and wide in a scalable manner – ensuring both that our service is available to all, and making a good business case for us 🙂
We believe that with this structure, team, and channel in place, we can truly make an impact in the way people go about their investments and personal finance – they would no longer have to choose between low cost and good guidance.
What we are not
While we think that we can make a significant difference to how people invest and manage their finances, we are also clear about one thing – we DO NOT need to be all things to all people. Here are a few things that we are not:
- We are not a transaction platform – there are several transaction platforms in the country right now – be it for investments or trading or insurance – and we don’t want to be another one. You can go with any platform of your choice and easily implement our investment ideas. Transactions have become commoditized, knowledge is not – and that is what our specialization is.
- We are not a content service – Most definitely not – we are not in competition with media houses – online or traditional. We are a products-and-solutions-first service that seeks to provide you with ideas for profitable investments and judicious management of your finances, while taking full onus for whatever we recommend.
- We are not a personal advisory service – we are a research platform that will tell you what is good and what is bad, and give you easily implementable packages and solutions (more on this below) – but personal advice is not a scalable proposition for us. That does not mean you can’t ask us questions about products – we will have both automated and individual services that provide answers to such questions backed by our research.
- We are not a free service – Good, unbiased, profitable research service does not come free 🙂
Essentially, everything that you need to be a confident investor, everything you need to know that you are on the right track with your personal finances, and everything you need to be sure that you are not choosing bad products.
So, finally, What is PrimeInvestor?
PrimeInvestor is a research platform that will
- Provide personal finance solutions – in the form of carefully packaged portfolios of products.
- One, these solutions will cover a variety of products, all easily accessible to regular investors, across deposits, insurance, mutual funds, stocks, ETFS, bonds, savings plans and more.
- Two, they will be tailor made for different life stages, situations, and needs. There will be special packages for different kinds of investors and unique situations. For example, you don’t need to have the usual aspirations of children’s education or wedding. You might want to save up to be an entrepreneur or simply build money to travel the world! Whatever it is, your needs will not be ignored.
- And, most importantly, they will not be one-time packages – they will be continuously maintained and updated with evolving market situations and products landscape. So, when you subscribe to a solution, you will always be able to stay up to date!
- Provide curated lists of products across the personal finance universe – what are the best mutual funds? We’ll tell you. What are the best deposit products? Answered. What is a good term insurance plan out there? You got it. How do I find out if my health plan is good, or is there a better one? You will be able to find out. In short, a one-stop place to find out what’s the best set of products out there that you can use for yourself.
- Provide ratings and opinions on a wide universe of products – You already have a portfolio, and want to know how it stacks up? You can readily see our product ratings to find out – these ratings will be uniquely developed and presented to make immediate and intuitive sense, and be an invaluable tool to review or rate your own portfolios or product choices.
- Provide market strategies and insights – The market keeps changing and evolving and moving in different directions. What is the best course of action for you? What should you do now? What is the impact on your portfolio? We’ll tell you so you can always know that you are on the right path, when to act and when not to.
- All this backed by solid, well-researched content and opinion – We will engage with you continuously to keep you abreast about all that’s happening.
And much more, in due course – easy to use and real-life useful calculators, ways to upload your statements and get a quick review of your holdings, ability to track and follow updates on products and get alerts, and more.
Essentially, everything that you need to be a confident investor, everything you need to know that you are on the right track with your personal finances, and everything you need to be sure that you are not choosing bad products.
All this for a low annual subscription fee that will ensure that you can take the low-cost route for the product and still be fully equipped with all the research and strategies you need.
In summary…
The Indian financial services industry has evolved tremendously in the last 10 years. A full suite of innovations, mostly enabled by technology, have taken the marketplace by storm. UPI has revolutionized payment systems, direct plans have shaken up the MF industry, discount brokerages have upended stock trading, NPS is making inroads in retirement planning, and many more.
This new and evolving scenario is making life easier in terms of execution and gives more choices in terms of variety of products available. However it has also made an investor’s life more complex, and prone to bad or risky decisions. PrimeInvestor seeks to solve that problem by providing independent, high-quality, totally unbiased research and recommendations, and making them available to all using a subscription model. A model where our only loyalty will be to you, our customers and subscribers.
It’s a unique proposition – one we believe is needed in the marketplace today and one we believe we are uniquely positioned to offer.
We hope we’ll succeed in our endeavour. We hope we will be a force of good in the market and make a positive impact.
But most of all, we hope we will help you make the right financial decisions and become confident investors.
