Bengaluru: Robo-advisory start-up Fisdom, which helps individuals invest in mutual funds, is looking to partner banks and adding an insurance option on its app to sign up more users.
“Insurance is something that should be live in three-four weeks. We are also working on adding bonds. Over a period of time, Fisdom will have lot more investment products like corporate bonds, tax filing. We’ll be a full-fledged personal finance manager,” said Subramanya S.V, chief executive officer.
Finwizard Technology Pvt. Ltd, which runs Fisdom, raised $1 million in funding from Saama Capital in October, and $500,000 in seed funding from angel investors including Silicon Valley-based venture capitalist Rob Chandra, CommonFloor co-founder Sumit Jain, TaxiForSure co-founders Aprameya Radhakrishna and Raghunandan G, and others.
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It was founded in 2015 by Subramanya, a former managing director of venture capital firm Bessemer Venture Partners; Ramganesh Iyer, who was an investment manager with Peepul Capital Advisors, and Anand Dalmia, who was with Macquarie Capital India.
Fisdom lets individuals who sign up for its service choose their savings goal—short term, retirement and so on—and the amount that they want to invest. An algorithm suggests the funds that they should invest in.
“Our research philosophy is not to be very aggressive. It is to generate consistent, relatively safer returns. Our promise to customers is not that every year we will generate highest returns—it is that over a period of time, can we beat your alternative, which is a fixed deposit, consistently,” said Subramanya.
Fisdom makes money through commissions from the funds it sells through its platform.
Robo-advisory firms have a significant market to capture by catering to new and inexperienced investors, as well as existing investors who want to switch to smartphone-ready, lower-cost solutions. Yet, they face a challenge in establishing trust with consumers.
“Gaining widespread acceptance in the Indian context could become another challenge as the solution should inculcate a sense of dependability. Furthermore, acceptance by technologically-averse individuals needs to be gained over a period of time for sustainable success,”said Kalpana B., partner and head, robotics and cognitive automation, KPMG in India.
“From an ethical dimension, robo-advisory services need to provide unbiased recommendations without sole objective of increasing sales. Robo-advisors should make an honest disclosure of the risk involved in the advice and try to maintain investor security by being a true fiduciary. Another question that needs to be answered is the ownership and liability in case of unforeseen consequences, whether a robot will be liable or a person or an organisation,” she added.