Actlogica, backed by Zerodha, seeks to find its place among financial planning tools for advisors

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For a financial adviser, choosing investments for their clients is no longer enough, thanks to the growing popularity of robo-advisors that provide financial advisory services based on fully automated, artificial intelligence (AI)-based software with almost zero intervention. human.

Would automation make traditional advisors redundant? That’s a discussion for another day. Right now, it’s an opportunity for advisors to embrace new technology and develop deeper relationships with clients that a bot can’t. It also relates to the idea of ‘holistic financial planning’, which has been around for a while, but has only started gaining momentum in India in the last few years. In the future, this would be the greatest added value of an advisor.

Now, in order to go beyond the simple selection of investments for a client, managers or advisors would need to empower themselves with technology and smart management tools to maintain their portfolio effectively and also derive insights and analysis to plan and grow the investor’s wealth.

This brings us to Actlogicaa Zerodha-supported wealth management and investment platformwhich launched two SaaS B2B products — FinFlo Company and Invested — for advisers, fund managers and intermediaries.

Founded in 2016 by a husband-wife duo Ameet Ayare and Archana Anoor, Actlogica is focused on streamlining the advisor process by synergizing technology and actuarial math.

“Majority of advisors in India, even to this day, continue to use Excel sheets to manage their clients’ portfolios or use age-old platforms that have not been modernized for years. You cannot achieve large-scale efficiency with them. Technology needs to be upgraded. Also, the idea of ​​holistic planning cannot happen without strong technology and in-depth analytics,” says Ameet, who has worked with various IT companies for more than a decade after earning a master’s degree in information systems for financial services in Edinburgh, UK.

Ameet and Archana have worked in the UK before return to india. A qualified actuary, Archana has nearly 14 years of experience in the fields of insurance, pensions and investment.

Synergize technology and finance

The idea of ​​bringing Technology and actuarial together has been on their minds for many years. Being entrepreneurial, they had started to explore the Indian financial market and understand how the processes are between stakeholders and potential gaps.

Their first try was in the insurance business, where they built prototype product modeling software for life insurance companies. Actuarial teams could use Actlogica’s user interface to create a mathematical model for life insurance products in minutes (which otherwise could take weeks).

However, the founders struggled to find the Product-Market-Fit (PMF) for the software in the Indian sector. The product was eventually scrapped.

In late 2017, the founders shifted their focus to wealth management as they began to seek out and interact closely with advisors, fund managers and brokers.

“We started collecting first-hand feedback from intermediaries, including large family offices and wealth management firms, and realized the gap on the B2B side. In addition to managing the funds and bringing transparency to portfolio management, it was about reaping the returns and creating a tool that would address all of that,” says Ameet.

The beta version of FinFlo was released in September 2020 and the first client was onboarded from Mumbai.

The startup was also part of T-Hub incubation program, Lab32.

What does it offer?

FinFlo Enterprise was designed for both advisors/wealth managers and investors. They can place orders to invest in mutual funds, stocks, ETFs, REITS, INVITS and bonds (to be added soon) or accept recommended investment transactions to buy and sell assets. They can track their goals, see the performance of their investments, access market reports and can also analyze the PMS and AIF.

Providing these metrics on a report would normally take hours or even days for investment managers to calculate, Archana informs.

“We continue to add new instruments to the platform. Our goal is to ensure that the user is able to place orders, pay, report and charge fees (in case of RIA) all in one place without having to do it in multiple systems,” explains Ameet.

On the other hand, wealth managers can separate investments into multiple portfolios, each with its own performance reports, asset allocation, and accounting. They can generate tax reports in addition to other analyses. The software can be used by asset management firms, investment managers, wealth managers, alternative investment funds, investment advisors and custodians.

Actlogica also has a Partnership with a process improvement product and a UK-based advisory firm specializing in asset management. They license FinFlo’s RPA engine and integrate it into their software.

The second offering is an API-first mutual fund CAS analysis and reporting software — Invest. Anyone with a Consolidated Account Statement (CAS) can instantly download, analyze and generate a performance report for investments in the CAS file. The software follows pay-as-you-go revenue model and the fees start from Rs 10.

“We are building an ecosystem of interconnected wealth management software tools. The first, most complicated and most important is FinFlo. We will now add to this ecosystem a bunch of others such as risk profiling, planning, etc. These can be connected to each other to create a customized version of the software that can meet business needs,” adds Archana.

The Actlogica team celebrates release of the Alpha version of FinFlo in 2019.

Competition, market analysis and potential

There’s a slew of B2B Wealth Management Software and individual tools available on the market. Most of the Portfolio Management Services (PMS) in India use software called Wealth Spectrumwho has been in the industry since 2001 and relatively higher licensed than their peers.

Other popular names are InvestWell, IFA Now, Wealth Magic, MProfit Advisor, etc. These are more economical offers.

Although Actlogica claims to have priced its products on the basis of cost, it aims to establish itself somewhere in the average of the premium and economy category and keep the product affordable for small and large customers.

“Our main USP is technology. We are a pure technology platform and want that to continue. We have curated unique features based on the needs of our target audience. We have a wide range of customers, which means that our users currently manage between five accounts and 10,000 accounts on a single platform,” he adds.

Also, many platforms/tech providers charge a percentage of the AUM that the board manages in addition to the license cost. FinFlo does not seek to follow this model and will only charge for technology.

Although still low, investor participation has increased significantly since 2016. According to information provided by the Securities and Exchange Board of India (SEBI), India is now home to 7.38 crore Demat account holders, 2.75 crore Mutual Fund (MF) investors and 1,324 SEBI Registered Investment Advisers (RIA), of which only 200 odd AIR do holistic financial planning and consulting.

It’s a expanding chain. As the number of smart investors grows, so does the demand for advisors and the need for sophisticated tools to better serve clients and grow their own business to stay ahead in the highly competitive wealth management space.

Zerodha’s strategic investment in Actlogica

In March 2022, Actlogica secured seed funding of Rs 3 crore from Rainmatter Capital, backed by Zerodha. Interestingly, Actlogica had come to the attention of Nitin Kamath, founder of Zerodha, through one of its potential clients.

“Zerodha was looking to deal with a large family office in Bengaluru that was using FinFlo. The CIO and the company’s partner insisted that they had to integrate with FinFlo in order to use Zerodha’s services. Zerodha, who keeps track of almost everything new in fintech, had never heard of us and word got out to senior management at Zerodha, including Nitin, and we connected,” recounts the co-founder.

“Being introduced to a large entity like Zerodha through a client’s trust is the best introduction,” he adds.

In the future, companies explore a common project, the details of which are still to be discussed. “We haven’t talked about it, but it’s a strategic investment,” adds Ameet.

Future plans

Currently, the startup serves nine customers, 70 percent based in Bengaluru, and has approximately 2,000 crores worth AUM. Number of Accounts went from 97 to 11,200, with 100% year-on-year (Y-oY) revenue growth. It has a telecommuting team 21 members made up of permanent and contract employees.

“We are looking to close the current fiscal year with doubling revenue. We were soon to launch a PMS fund account management tool. We are also currently thinking about bringing high-end investment management tools to low-cost investors, including retailers,” says Ameet.

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