Once colleagues at a multinational bank, Thabresh I and Deepak Singhal joined hands to begin their entrepreneurial dream in 2018. The quest to offer a holistic solution to clients and encouragement from clients gave birth to Infinity Money Mart. Operating from Chennai, Infinity Money Mart caters to over 200 high net worth families.
The duo observe that investors in Chennai are relatively conservative as compared to other metros when it comes to taking exposure to equities. This offers them a great opportunity to serve an underpenetrated market.
“Tamil Nadu is among the top five contributors in terms of GDP to the but the mutual fund assets under management in the state is not at par with other states. The money is locked in physical assets which hopefully will unlock in future,” says Thabresh.
The firm offers multiple products like PMS, direct equity, bonds, mutual funds and insurance by leveraging technology.
Off to a good start
Working at banks helped Thabresh and Deepak get acquainted with processes, systems, technology and compliance, which has been instrumental in making sure their start-up has the right foundation for a smooth take-off.
They are not merely looking at growing their asset base but looking for building long-term client relationships by working towards helping clients achieve their life goals.
“Investors are looking at long-term relationships with their adviser/MFD. Our journey starts from identifying investors' goals and we draw up a roadmap to achieve it. This ensures that our relationship is not merely transactional. Our first client is still with us,” says Deepak.
Thabresh and Deepak believe in catering to a select number of clients, whom they can give their full attention. Being a start-up does not mean the duo onboard all types of clients. “Some clients have unreasonable return expectations. Many a time, we have said no to a few prospects by sacrificing new business,” points out Thabresh.
A majority of their clientele consists of high-net-worth individuals. They say that one of the primary goals of HNIs is to preserve the wealth for the next generation. “Each client has a different objective. For instance, we have a client who wants to build a Rs 50 crore portfolio. They have goals such as overseas education, overseas vacation, retirement planning, entrepreneurial venture fund, charity and so on,” says Deepak.
Behavioural coach
They believe that MFD/adviser’s job is more about behavioural coaching and not just facilitating investments. “Your returns depend on the market and fund manager. However, how clients behave when the market crashes is more important. As the famous saying by Warren Buffett goes, “The market is a place where the money moves from the impatient investors to the patient investors.” Advisers help them to decide when to invest/increase allocation in certain asset classes when to book profit and help them avoid taking knee-jerk reactions. That’s where the adviser alpha comes in. Some studies have also shown that investors who invest through advisers earn higher returns as compared to unadvised investors.”
Thanks to the sustained bull rain since 2020, they have observed that today, one does not need to explain equity to clients. “People want to invest in equity today, thanks to the rally. But remaining invested is the key.” They believe that asset allocation is the key to making long-term wealth from equities and protecting the portfolio from large drawdowns.
Stick to asset allocation
Thabresh believes that successful investing is about learning to manage risk and not avoiding it. Sticking to asset allocation has helped their clients witness lower drawdown in the 2020 market crash.
Talking about identifying the client’s risk profile and goals, Thabresh says that the traditional rules of thumb of financial planning are and not cast in stone. “Risk profiling is subjective. There is no one-size-fits-all approach. A person aged 30 years may not have the willingness and ability to take risk if he/she does not have a strong financial background. By the same token, a person aged 60 years may have the willingness and ability to take risk in equity if he/she understands the risk and don’t need the money for any emergency. Age is not a determinant of risk appetite.”
Handholding
Thabresh says that digitalisation is not the be-all and end-all. They see technology as an enabler. “Technology is helping in expanding the market. It has given birth to a lot of DIY investors. But investors should not merely look at investing from the lens of saving costs. There is a lot of unclaimed money lying with insurance and mutual funds. The family is unaware of the investments. This is where advisers/MFDs help in terms of making sure that your money reaches the beneficiary. A majority of people work to leave behind wealth/assets for their dependents. Further, investors are susceptible to recency bias which leads them to invest in asset classes that have generated the highest returns. We help them overcome such biases from investing.”
The road ahead
They are working towards becoming a full-fledge family office, which will take care of clients' goals like succession planning, taxation, under one roof.
Going ahead, the duo is also exploring setting up overseas offices to tap the growing demand for international diversification.
