Fincart was born as a Hybrid Online Assisted Technology Platform, says Tanwir Alam, Founder and CEO of Fincart , who in an interaction with CIO Axis, reveals what made him quit a well-paying job to kick-start his own venture.
CIO AXIS: You were working as a Director & Head – Retail Sales at IDFC Mutual Fund. What inspired you to quit a well-paying job and kick-start your own venture?
Tanwir Alam: Before starting Fincart, I was with IDFC MF as Director & Head – Retail Sales. I had the opportunity to interact with National Distributors, boutique wealth management firms, and Independent Financial Advisors and understand their business model. On the other hand, I had friends who were corporate employees. There was a huge gap between what the financial distributors brought to the table and the expectation of corporate employees.
I saw a huge opportunity to serve the corporate employees and help them with holistic solutions. I mustered the courage to quit a well-paying job and kick-start my venture.
CIO AXIS: How do you see the Mutual Fund & Wealth Management Industry evolving in times to come?
Tanwir Alam: BCG – AMFI report suggests that the Mutual Fund Industry will grow from 38 Lac Crores to 100 Lac Crores; from 2 Crore unique investors to 10 Crores unique investors. The need to have 5 Lac Mutual Fund Distributors from the current 1 Lac Agent.
We have carved out a simple vision for ourselves and we wish to achieve it by 2030. We want to partner with 50,000 Agents and get to our goal of serving 10 Million Customers.
CIO AXIS: When people kick start a business, they talk of solving a pain point. What was the pain point that you wanted to address?
Tanwir Alam: Unfortunately, a majority of the intermediaries that are opening to the public have been pushing agents who are focussed on selling a particular product. Corporate executives prefer well-informed advisors whom they can trust with their hard-earned money. Post ban on the entry load, the revenue from Mutual funds dropped significantly, hence it warranted a need to build a more efficient model.
When we opened the shop, we had two business models – on one end of the spectrum you had Robo-Advisory (a fully automated do-it-yourself model) and on the other end of the spectrum, you had the conventional brick-n-mortar model. We choose a Hybrid Online Assisted Model.
CIO AXIS: Robo-Advisory business has also been successful and so are the conventional physical brick & mortar model. Why did you adopt a hybrid online assisted model to offer your services?
Tanwir Alam: The Robo-advisory works well with financially literate and well-informed individuals. Furthermore, the ticket size in the case of the Robo-Advisory platform was very low. This would result in low revenue, in turn, making one perpetually dependent on funding from VCs.
While the physical brick-n-mortar comes with expensive overheads, it is extremely accessible to high net-worth clients, with a very high-ticket size of investments.
We wanted to serve the Affluent and the Indian Middle Class. Hence, we kick-started the Hybrid Online Assisted Model. I set out with this belief and over the years turned it into a reality.
CIO AXIS: What’s your Vision for FINCART?
Tanwir Alam: The BCG – AMFI report suggests that the Mutual Fund Industry will grow from 38 Lac Crores to 100 Lac Crores; from 2 Crores unique investors to 10 Crores unique investors. The need to have 5 Lac Mutual Fund Distributors from the current 1 Lac Agent.
We have carved out a simple vision for ourselves and we wish to achieve it by 2030. We want to build a distribution network by partnering with 50,000 Agents; who will manage 2000 clients, each enabling us to meet our goal of serving 10 million Customers.
CIO AXIS: How do you plan to accelerate growth?
Tanwir Alam: We have painstakingly built an in-house platform. Now we wish to take this platform out to the existing distribution network of agents. The platform is built with the intent to automate a lot of personal finance solutions and help them transact and manage clients online. Additionally, it will provide high revenue financial products and also marketing assistance.
This will help us scale the business by leveraging the existing network and simultaneously building new distributors in the industry.
CIO AXIS: Do you plan to grow organically or raise funds to accelerate growth?
Tanwir Alam: We have grown the business organically until now. Our Revenues and PAT (after amortizing software expenses/taxes) have grown 800% over the last 4 years. It is our heartfelt desire to grow the business organically & profitably. However, we are not averse to the idea of fundraising and will come to raise when the need arises.
CIO AXIS: Could you give us some more insight on what kind of efforts you undertake as the CEO?
Tanwir Alam: My job as a CEO is to articulate a clear and very specific vision. Get the right set of people, and align them to passionately chase the set goal. Have a clear set of evaluation metrics for each one to ensure we continuously track progress, achieve smaller milestones, celebrate the smaller achievements/milestones, and keep them focussed and motivated to achieve the long-term goals/ vision.