When it comes to a B2B consulting firm that is working towards helping wealth managers to maximize their understanding and due diligence of the investments, Finolutions Wealthcare will always lead from the front.
Today, we speak to a man who created a whitespace business idea in an otherwise crowded industry, Apoorva Vora, Founder of Finolutions Wealthcare, to understand how Finolutions Wealthcare works and how it is helping wealth managers to achieve more through its service.
TechGraph (TG): Before we start the interview, can you let our audience know more about your role in Finolutions Wealthcare?
Apoorva Vora: I am the founder of Finolutions Wealthcare, and the idea of Finolutions came to me through my vast experience and exposure within the Financial Services space.
Having worked in this field for more than 24 years in financial services, I came to analyze what was lacking and also what could improve wealth management processes and techniques and help create best practices for wealth managers.
TG: What is Finolutions Wealthcare, and why it is different from other service providers who are already in this sector?
Apoorva Vora: Finolutions is a B2B consulting firm for Wealth Managers. We help wealth managers to have access, assess, and associate with investment products, by assisting in upscaling their understanding and due diligence of the investment avenues beyond the usual.
Where most of the B2B players work on a Masters Franchise and a Sub Broker model, we work alongside the wealth manager more akin to their team members.
In the traditional B2B model, a wealth manager will end up revealing the identity of his investor(s) and also miss out on direct access to products. Our business model removes this inefficiency of such a traditional B2B model for a wealth manager.
A more personalized approach is what differentiates us from other B2B firms as we go the extra mile by creating tailor-made solutions for each of our partners.
TG: What was the idea behind the launch of Finolutions Wealthcare and how it all got started?
Apoorva Vora: We found a gap in the wealth management space where a lot of wealth managers had great client relationships but were missing out on an independent source of products, related know-how, and due diligence capabilities. We decided to work on that niche segment.
Having worked in the corporate world for nearly three decades, and in the financial services industry since the mid-’90s, I always had a strong desire to be meaningfully different whether in a job or self-employment.
In the second half of 2013, I decided to venture out and take up an outsourced product function as the main business segment. With the help of a few well-wishers and friends in the industry, I shaped up the business model to start Finolutions in September of 2013.
TG: While researching on Finolutions Wealthcare, our editorial team stumbled upon that there are different products available on the platform. Can you explain more about them to our readers?
Apoorva Vora: Our approach is to work in the segments where we have a visible role of value addition. Since most of the wealth managers work actively in the ‘Mutual Fund’ segment but are apprehensive or tentative in approach towards other high-end products, we decided to focus on those segments where the partners require qualified inputs.
We assist in product segments such as Portfolio Management Services, Alternative Investment Funds, Structured Products, Global Investment Avenues, etc. In each of these segments, we have a fairly large universe of products for evaluation.
After thorough due diligence, we guide partners to onboard products that suit the wealth manager and their client profiles – while we remain a product-neutral platform with no product push from our end. The final decision always rests with the wealth manager.
Each of the mentioned products requires an in-depth understanding and a lot of comparative access as well as study.
TG: We saw that Finolutions Wealthcare also engages with Startups. Can you tell our readers how Finolutions Wealthcare helps the startup?
Apoorva Vora: Just as it is important to understand stocks when playing a role in Equity Mutual Funds, we believe it is important to understand the startup ecosystem if you were to play any meaningful role in AIFs that invest in Seed/Angel, VC or PE stages.
Let me elaborate. Finolutions is confining its activities only to regulated products. We do not play a direct role in startup fundraising, etc., but help an AIF in raising the fund, which in turn would invest in an underlying startup independently. We do not claim to have expertise in carrying out due diligence on individual startups, not have we attempted to do so.
TG: As the country is in lockdown and many of the people are struggling to manage their money. What advice would you like to give them as a financial advisor?
Apoorva Vora: As a pre-dominant B2B player, we assist wealth managers or financial advisors in strategizing their business models and practices. Advising to end investor is their domain thereafter.
In a lockdown, our advice to our wealth management partners has been to:
(a) focus on the new normal of investor approach, which is through virtual meetings, and adopt the same quickly;
(b) use virtual meeting options for better investor outreach since investors are relatively free and receptive to your views;
(c) upgrade your knowledge level and not be confined to just a few products and services you have been offering since along.
(d) explore the fitment of newer themes that are more tuned to the current time, and see if there is an investor portfolio fitment for such themes.
There is no substitute for “being in touch” in tough times. If it cannot be personal or physical, one must switch to virtual.
As for the investment options that we are recommending, as stated earlier, it is tailor-made depending on the partner requirements, and hence elaborating on any specific strategy will not be possible.
TG: Where does Finolutions Wealthcare stand on the profitability metric?
Apoorva Vora: As a consulting firm, the business remains asset-light. Capital-intensive businesses face larger challenges of profitability and survival during tough times.
Fortunately – the segment that we work on is not affected by the pandemic.
The bulk of the fee receipts is from consultancy assignments and with the increasing interest of the HNI segment in ‘Alternative Investments’ as well as Global Investments, we hope to remain on a steady profitable trajectory for foreseeable times.
TG: Where does Finolutions Wealthcare stand in terms of capital under management?
Apoorva Vora: The typical term used in the industry is Assets Under Management (AUM) which does not capture the essence of our business in its true sense. This is large because as a B2B player, we do not manage client assets. It is difficult to assess the exact percentage of Assets Under Influence also.
However, our partners are spread across 27 different locations in India and are over 275 in number. Collective assets under management of these partners put together could exceed Rs. 50,000 Crs.
It must be noted that we could be playing a very negligible role in many of these relationships, and therefore an exact value of AUM or AUI is not so relevant.
TG: Since its inception, Finolutions Wealthcare has launched multiple services, which among these generate significant revenue for Finolutions Wealthcare?
Apoorva Vora: Besides helping the wealth managers in offering better product outreach, we also help a very selective number of product providers in developing their distribution outreach.
This includes playing a consulting role with those asset managers in designing distribution strategy and structure, industry insights, as well as meaningful wealth management introductions.
Such select distribution outreach consultancy roles have seen significant traction in recent times.
TG: Leading the sector from the front, what according to you is one of the biggest pain points of financial advisors that need to be addressed?
Apoorva Vora: In our view, a large number of advisors have remained confined to select investment products, and within their comfort zones.
Unfortunately, some such products may have served the purpose of investment management for retail investors but are inadequate to satisfy the evolved investors. One of the most common reasons for this has been a lack of awareness and education about products beyond the usual.
Just like there is a strong need at the retail level for investor education (for which SEBI and Association of Mutual Funds in India are working very hard), there is a need for advisor education from a wealth management perspective.
TG: Is there any plan to enter new vertices too?
Apoorva Vora: We would stick to B2B plans and will remain open for any new segment for assisting our partners in enhancing their practice. The latest in this segment is supporting them on transition and succession plans for Business Families.
The family consulting business has been gaining traction though it is a relatively new concept in India. We recently partnered with Australian family business advisor FINH to provide strategic advisory support for their endeavors in India.
We will be assisting FINH which is seeking to reach out to those families in India who have the intention of developing and then passing wealth/business to the next generation.
This will include families with a Net Wealth of approximately USD 50 – 150 million and above. However, considering the characteristics of the Indian family-owned businesses, they would be open to looking at lower amounts subject to a minimum of USD 20 million. Apart from this, we have no plans to look at any non-related segments.
TG: What is the roadmap for Finolutions Wealthcare going forward?
Apoorva Vora: For us, developing an understanding of the business and setting up a workable model across timeframes and business cycles is most important.
We are past the setup stage and have successfully overcome the survival challenges. We are now poised for our next stage of growth and are exploring synergies in the same direction.
Though in the early stages, we are exploring possibilities of strategic partnership, including meaningful involvement in a large scale expansion of our network by adding more wealth management partners as well as products and segments that may have wider appeal.
This is not through inorganic acquisitions, but through partnerships in the existing structure and scale of the current business to newer frontiers, including possibly offshore partnerships by 2021.