How a PMS (portfolio management service) distributor can use Finalyca to provide customers with maximum value.
A PMS distributor— in many ways—resembles a doctor.
Each case needs individual attention, and even a tiny mishap while handling the people who come to them for consultation can have grave consequences.
The PMS distributor needs highly specialized analytical capabilities to attend to each case.
Now, let’s call the PMS distributor, Mr. Singh.
A client of his, Mr. Kumar, reaches out to him via WhatsApp.
“I have two PMSs,” said Kumar. “The Hyper-Achiever Fund and Mega-Achiever Fund. And now, I want a third one to maximize the value I get from my investments. I’ve come to you, given how data-driven your recommendations are.”
Now, the PMS distributor has a not-so-secret weapon, which draws in high-net-worth clients like Singh—the Finalyca platform.
Here’s how he leverages India’s first and most comprehensive data analytics platform for PMS distributors and wealth managers to give his client the best possible advice.
Fund mining based on the client requirements
The PMS distributor logs into Finalyca and goes to the Fund Mining option with the client’s requirements in mind.
The client wants a PMS that meets the following criteria: Low beta
- Net assets of at least 5000 crores
- A minimum of 5 years in operation
- Mainly invested in equity
Two funds show up, the Power-Achiever Fund and Super-Achiever Fund. Both are multi-cap funds. The former boasts 14.21 % returns in 5 years, while the latter gave investors 8.41 % in returns.
While the Power-Achiever Fund product seems better on the surface, the analysis is far from over.
Checking the fact sheets
Going to the Fact Sheet of both the funds yields some detailed insights.
- Since its inception, the Power-Achiever Fund investment vehicle has yielded 18.48 % returns compared to the 10.84 % that its benchmark, the S&P BSE 500 Index, has delivered.
- The Super-Achiever Fund plan has given 15.12 % since inception compared to the 11.19 % that its benchmark, the NIFTY 500 Total Return Index, gave in the same period.
- A great measure of risk is the market cap composition of the PMS portfolio. The Power-Achiever Fund has invested in slightly more large-cap stocks than Super-Achiever Fund.
- Currently, the top holding of Power-Achiever Fund at 7.06 % is BAJAJ FINANCE LTD., a major player in the finance sector. Super-Achiever Fund, meanwhile, has bet big on ICICI BANK LTD., with 12.2 % of its portfolio parked in the banking giant.
- With a higher beta value of 0.95, Super-Achiever Fund seems to be the more volatile fund. Notably, Power-Achiever Fund has a beta value of 0.92 for the same three-year period.
- The Sharpe Ratio for three years is 0.74 for the Power-Achiever Fund, while the value stands at 0.6 for the other fund, meaning the Power-Achiever Fund is less risky and offers better, more stable performance over the long term.
A person looking for a great deal for their clients can even delve into factors such as expense ratio, exit load, etc.
Aside from that, if the distributor is bullish on a particular sector, he can select a PMS with many stocks in that sector.
Moreover, the PMS distributor can compare the fund’s performance to other funds in the same category under the Funds in This Category section of the Fact Sheet page.
It is worth mentioning that the person analyzing the PMS can check out a list of all the media stories about the PMS in recent times to weed out the PMS’ that have received warranted, negative publicity.
Most importantly, the distributor can perform a deep dive into the credibility of the fund manager, seeing detailed information on cash levels, consolidated holdings, exposure to various sectors, top holdings, performance over different periods, etc.
Comparing the funds and selecting the ideal PMS
Two key types of comparisons are possible with Finalyca.
First, the PMS distributor can check how much the two funds he shortlisted overlap with the client’s existing portfolio. Upon using the Funds Overlap section for this analysis, the PMS distributor sees that Super-Achiever Fund has nine stocks in common with the client’s existing portfolio, while the Power-Achiever Fund has ten stocks in common.
Another possible comparison is the one that can be made via the Funds Compare option. Here, the PMS distributor loads the names of the two funds he shortlisted. Finalyca instantly generates a comparison table of the two funds, and the distributor can see all the information from the Fact Sheet of the two funds lined against each other.
Based on all this analysis, the fund manager recommends the Power-Achiever Fund to the client.
Even though the fund slightly overlaps the client’s existing portfolio, the other advantages of the fund over Super-Achiever Fund significantly outweigh the issue.
Sharing detailed reports with the client to convince them
The best way to convince someone is to “show rather than tell.” With Finalyca, the PMS distributor can download comprehensive reports comparing the funds, the risks involved in each investment, trend analysis, performance over time, etc., and send them to the client as a PDF or an Excel sheet. These reports can even be directly emailed to the client for consideration.
Digitally onboarding the client
Once the client has been shown the reports and convinced that the PMS picked for him is ideal for all his goals, the PMS distributor can quickly onboard him before he changes his mind. An application can be filed through the Finalyca platform using a distributor code.
The best part is that the onboarding time of clients goes from around four weeks to an hour. Also, with the Finalyca platform, a single sign is needed for onboarding. At the same time, the traditional way to bring a client on board takes about 55 to 80 signatures and other time-consuming formalities.
This level of convenience guarantees that PMS fund distributors can bring in many clients at a minimal cost.
Finalyca is the only platform as software in India with access to all significant PMSs, ULIPs, mutual funds, and AIFs in a single portal. It is worth mentioning that about 80% of the PMSs in the market find coverage in the platform, making it a boon for PMS distributors looking to provide the best possible value for their wealthy clients. If you want to access the powerful insights from India’s number one data analytics platform for PMS distributors so that you can serve your clients better, reach us for a demo.
The names of the funds are made up. The article is only for showcasing Finalyca’s features. Check out the Finalyca platform to get insights into funds from the real world.