Robo advisory platform worldwide are gaining immense popularity. Team NewsBarons spoke with Mukesh Singh and Amit Mehendale, co-founders of Robobanking.in.
NB: What is Robobanking as a concept and how does it help users?
Amit: Robobanking allows clients to invest under fiduciary standard for all mutual fund products like SIP, lump sum investment or goal based investments like education, marriage and is not limited to retirement.
Our Robo advisory platform is based on some of the finest financial models in the world including Nobel Prize winning Portfolio construction model from Harry Markowitz and is customized to Indian financial markets. We have built a platform in a way we wanted our financial transactions to flow- Online, seamless and paperless and safe.
NB: Explain the Robobanking service/fee model?
Amit: Our platform (robobanking.in) offers you a choice to select between fiduciary advisory model and the traditional advisory mode.
When you opt for Fiduciary model, we will not receive any commission from investment products bought by you from the platform and you will be expected to pay us platform fee or advisory fee yourself. This aligns the interests of investor and financial advisor. This means, by definition, we have no incentive to suggest or list a product that gives us higher commission. This creates unparalleled incentive for investors to use our platform.
If you opt for Traditional advisory model, you will not need to pay us any fees and you can use select features of our platform. In this case, we will derive commission/fees for any investments that you make through us.
Robobanking charges only Rs 99 per month, investors can invest or redeem online and even monitor their portfolio performance online with the possibility of changing schemes as per performance.
NB: How is investing in direct plans advantageous for investors?
Mukesh: Robobanking allows investors to invest in direct scheme of mutual funds and investors get the choice to invest based on recommendations from Robobanking or in DIY (Do It Yourself) mode. Investing in direct scheme offers huge saving to investors.
Direct plans generate better returns as they come with a lower expense ratio as compared to regular plans and as per industry estimates, the difference between expense ratios of the two types of plans can be as low as 10-50 basis points in certain schemes and can be as high as 100-140 basis points in certain schemes.
NB: How secure is your platform?
Amit: Our platform provides very strong level of data security and encryption. We use cutting edge encryption and store data on servers in secure facility. All emails coming from Robobanking, address the user by name and will be sent from single email address, which will allow to confirm the genuineness of communication.
NB: Is Robo advisory a common practice across globe?
Amit: Robo advisory platforms are transforming financial advisory and wealth management business worldwide and clients are moving money away from traditional advisors to robo advisors. In just 2016, investors have moved billions of dollars from traditional advisors to Robo advisors.