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A B2B platform allows smallcase investing: Here are the details

For retail investors, it gives access to curated portfolios

January 31, 2022 / 10:21 AM IST

Fintso, a Mumbai-based technology platform that offers backend technology and research support to distributors and registered investment advisors (RIA) in smaller towns has tied up with smallcase. This tie-up is for offering portfolio management services to investors in smaller towns.

This is the first time that smallcase – a technology platform that offers theme based and managed stock portfolios – has tied up for an assisted workflow with a non-broking distribution platform. More importantly, this is another example of how technology is making it easier for retail investors to access market-linked financial products with ease, while retaining the benefit of curation and advice.

Widening the reach

Fintso is a platform for independent financial intermediaries. These advisors who would have access to clients, wouldn’t typically have a backend support to do after-sales service of their clients. That is where Fintso comes in; registered advisors and distributors can simply upload their client portfolios, use Fintso’s platform to slice and dice them, to transact, generate reports, maintain records and so on. Such distributors were able to offer mutual funds, fixed deposits and other investments to their clients, but the question was: how to offer direct equities in a curated portfolio.

Here’s where Fintso’s tie-up with smallcase comes in. The advisor/distributor pays Fintso a subscription fee for access to these services. According to George Mitra, Founder and CEO, Fintso, “Giving access through smallcase means you can invest in good quality managed funds in small sized investment amounts. More over for retail investors it is access to curated portfolios. We found that the existing client base of the advisors and distributors who are connected with Fintso, for a large portion of their equity investment, have a large cap bias. We wanted to deepen their access by giving the choice to invest with a successful large cap fund manager who is not yet available via smallcase.”

The objective was not to be exotic or unique, rather to cater to the retail investors’ need for access to a good large cap fund manager, democratising wealth management as Mitra puts it. As a result of this process of curation that Fintso conducted for their subscribers and the collaboration with smallcase, the Alpha Leadership Portfolio managed by Pankaj Murarka of Renaissance Investment Managers, is now available via smallcase for Fintso’s clients.

A PMS at a fraction of a cost

Many consistent and well-performing fund managers who run PMS strategies are inaccessible to the retail investor who is seeking alpha or excess return from their equity portfolio. The reason being that the minimum investment required in such portfolio strategies (Rs 50 lakh, as per SEBI norms) is too high for the average retail investor. The tie up between Fintso and smallcase, is a good example of how technology can bridge this gap.

Pankaj Murarka’s large cap strategy- that Fintso has identified as a relevant fit for the clients managed by its subscribers and who has now been onboarded to the smallcase platform- is now available for a minimum subscription of Rs 50,000.

At the same time, the layer of curation (by Fintso) and advice (by the independent financial intermediaries) remains intact for the end client, the individual investor. Hence, while technology gives access to more financial products and solutions, investors are still shielded by advice which is customisable for their unique requirements. In other words, a win-win for all.

Fintso currently has 3,400 financial product distributors on its wealthtech platform who manage around 15 lakh retail investors. On the other hand, smallcase has onboarded 200 different investment managers and advisors and has tied up with 14 different brokers so far. These are both tech driven businesses. More such innovative applications and collaborations will mean that wealth management and advisory becomes a democratised service, reaching the retail investor in every corner of the country.

Why smallcase works well

For smallcase, the objective is to grow wider and become a part of every equity investor’s portfolio. A tie-up with Fintso seemed like a natural progression. Typically smallcase is available through stock brokers.

According to Vasanth Kamath, Founder and CEO, smallcase, “We are building the eco system in multiple use cases and this tie-up unlocks a new use case for our platform. We have an API layer, the smallcase Gateway, which can be shared with non-broking platforms to invest in stocks, ETFs and smallcase portfolios.”

For investors the ease in transaction makes it attractive too. If they already have a demat account, then they can use the same demat account to buy the smallcase product, through Fintso. Alternatively, you can open a new one.

With this API link from smallcase, searching for managed portfolios, tracking performance and transactions can become seamless for retail investors managed by independent financial intermediaries who subscribe to Fintso’s services, across the country.

Lisa Barbora is a freelance writer. Views are personal.
Tags: #invest
first published: Jan 31, 2022 10:21 am