Adviser Perspectives: 20,000 unique investors in 4 years

By Ravi Samalad |  19-05-22 | 

Like many young aspiring professionals, Hitesh Jain started his corporate career after finishing his Company Secretary course and a Master of Business Administration. His first job was at Aviva Life Insurance, Gurgaon, where he was involved in Business Planning. “We used to report to shareholders of Aviva PLC. It gave me a good understanding of business planning and analysis. We could look at the business from the shareholders' perspective as to what they wanted from the business. This offered a good holistic view of the entire business,” recalls Hitesh.

Home is where the heart is

Despite having an enviable career, Hitesh took a leap of faith and started a new chapter in his career by moving to his hometown in Kolkata, where he had spent his childhood. He took up a job at Ashika Stock Broking where he was heading business development for retail. “This is where I learned the ropes about building a retail business and the challenges sub-brokers face.”

In 2013, Hitesh sensed that people were gravitating towards mutual funds which helped them build wealth.  He spearheaded the setting up of the mutual fund distribution arm in Ashika Broking. He developed this vertical from scratch.

Inflection Point

After a decade of corporate stint, Hitesh dreamt of striking out on his own by putting his collective experience to create a new mutual fund distribution model.

He quit the broking firm in late 2017 to start his venture Finomatic Fintech Services. He invested his personal savings in his venture while his wife Nidhi, CA, provided the financial support for the family till the business could breakeven.

Unlike fellow individual distributors, who typically start off as a one-man show, Hitesh decided to build a sub-broking model. This model also created employment opportunities in Kolkata. He started training LIC agents, postal agents, and retired bank officials on the technical and soft skills aspects required to distribute mutual funds based on clients’ risk profile and goals. “As an individual distributor, I could have limitations in terms of how much we can grow. With a sub-broker model, there is no limit."

His entrepreneurial journey was nothing less than a roller coaster ride. In 2018, the mutual fund industry moved to an all-trail model. This hurt the upfront cash flows of his sub-brokers. Nevertheless, Hitesh encouraged his partners to continue their work by explaining the long-term benefits of a trail model. Barely two years in business, he faced another setback in the pandemic-induced 2020 lockdown. But technology came to his rescue.

Hitesh had built his in-house proprietary tools, platforms, and apps for building a truly digitalised firm. This paid off rich dividends when the Covid pandemic struck as offices moved to remote working.  Their Finomatic Patshala app offers 100 plus educational videos for its partners. Finomagic app takes care of servicing and back-office requirements of partners while the Finomatic app is used for transactions, portfolio view, and partner onboarding.

“Right from inception, we had been executing all our trades on the NSE NMF II platform. We received recognition from NSE NMF II for the highest volume in the East region in 2019. This was a true test for us, and we could sustain our business during the pandemic.”FG

Today, he has an army of 250 plus sub-brokers who offer a host of products including mutual funds, insurance, and loans, among other products. They have 20,000 unique investors across all businesses. Together, they have built assets under advisory worth Rs 270 crore in mutual funds while the Systematic Investment Plan (SIP) book stands at 4.50 crore.

Bulk SIPs

Hitesh was inspired by Big Billion Sale campaigns of fintech companies and aspired to do something similar in the mutual fund industry.

In 2019, he conceptualised punching in bulk SIPs to commemorate his company’s first anniversary by logging in 595 SIPs. Encouraged by the good response, he set out for a higher target for the second anniversary. In 2020, his team clocked in 2,300 in a single day. In 2021, they achieved another milestone of 3,800 SIPs which created a record on the National Stock Exchange MF distribution platform. They celebrated SIP month by registering 5,500 SIPs worth Rs 1.11 crore in January 2022.

Hitesh has set some ambitious targets for his firm for five years:

  • SIP book of Rs 50 crore
  • 500 sub brokers
  • 1 lakh individual investors, mostly retail

The pie is bigger

Hitesh is unfazed by competition from larger players like NJ India and Prudent who operate on a similar model. Hitesh’s differentiation is that he brings new distributors into the mutual fund fold and enjoys their loyalty earned through training and handholding them. He claims that only 2% of his partners have left the firm so far.

Hitesh believes that while the industry is growing at a fast clip, a large part of the market is still underpenetrated which leaves ample room for many distributors and players like him to thrive. Hitesh’s aim is to build a sustainable business backed by technology and excellence in service with a focus on retail investors who can bring in sticky money.

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krishnaraj ved
Jun 1 2022 05:03 PM
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