WF: We now have MF trading available on BSE/NSE. How do you see this changing the lives of advisors? Would you consider taking up a terminal to execute your clients' MF transactions?

Apsara Shetty: No, currently I would not like to consider the NSE platform, rather I would with for the AMFI platform that is coming up for distributors. I would really like to wait for that, because currently if I am going to do it on the BSE/NSE, I am not the main broker, so I am going to lose my identity. If the main broker is also into financial planning and insurance like many brokers are today, I don't want to expose my clients to the broker.

The idea of having an online platform is a good one - it will make our lives much easier, especially for NRI clients, moving of funds will be much more easier, but then it will take some time because I think there are various tax issues as far as debt funds are concerned, so presently I am not going to trade on the BSE/NSE platform.

 

WF: Do you think your clients might see filling up multiple forms and cheques as inconvenient, now that there is a more convenient format available in the form of trading on exchanges?

Apsara Shetty: As of now, very few clients are even asking about this. Clients are not that interested in platforms now - going forward, you will see interest building up. Sometimes it may take a generation - when ATMs were first introduced, it took quite a long time for it to catch on with the masses - but look at how common their usage has now become. I think platforms will be used in future, but I think presently you will need lot more counselling on that.

WF: And what would you look for in a platform - what should it offer you to make it an attractive proposition?

Apsara Shetty: It should make my life easier, it should reduce the manpower I currently need to run my business, it should save me money.

I have people running around collecting forms, people filling forms, people doing data entry and maintaining my systems. There can be significant cost savings if these functions are eliminated or reduced by using a platform.

If the platform also helps with billing and recovering fees, that's a big advantage - otherwise we would spend far too much time in billing and following up for collecting our fee cheques. So it will make our lives really easy and we can really concentrate on advisory bit of business.

WF: Would you look at a super distributor platform that can offer you all of these facilities?

Apsara Shetty: I am very clear that I don't want to be a sub broker. I do not want to disclose my client information to somebody who also directly solicits clients for the same service.

WF : How do you see the advisory business evolving in light of these developments?

Apsara Shetty: I think there is going to be lot of consolidation of business happening, going forward. I think there will be some advisors who will be selling out, and some who will take on new partners into the business. Those kind of things will happen and its going to evolve in next 2 - 3 years.

But one trend I see emerging is in the financial planning space - that is pure writing of financial plans. There will increasingly be a growing set of clients who will ask you to write a financial plan and then execute it themselves - using platforms etc. Once the AMFI platform comes up, it is also for investors - and not just for advisors. Large clients with substantial AuM and large investment ticket sizes may gravitate towards transaction platforms that offer them convenience at little or no cost. That doesn't mean they don't need advice. This is where the role can get clearly split - between advice and transaction execution. We write a plan and charge for it. The client then executes the plan in the manner he thinks is most cost effective and convenient.

Even today, we give our clients two options : pure writing of financial plans and financial plans with execution services. I think this trend will catch on in the years to come.