How PPFAs try to change wealth management with simple advice

Copyright © HT Digital Streams Limit all rights reserved. Money Parikh Financial Advisory Services (PPFAS) Ltd, known for its flagship Flexi-Cap scheme, begins a wealth management division. Summary The game plan is to repeat the core philosophy that has driven PPFAS’s fund management company over decades, says Khushboo Joshi, chief wealth officer of PPFAS Wealth. Mumbai: Parag Parikh Financial Advisory Services (PPFAS) Ltd’s flagship Flexi-Cap scheme has a cult that follows in the mutual fund space. After all, it has generated a composite annual growth rate (CAGR) of 18% since the launch in 2013. But during its annual unit holders meeting in 2024, one of its shareholders had an interesting story. Financial advisers sold her an unlisted debenture and promised good returns. When it was time for her to pay for her daughter’s fee, she found that the investment was illicide. Later, she told the PPFAS team that she had no choice but to sell units in the PPFAS Flexi-Cap scheme to pay for her daughter’s college. Khushboo Joshi, chief wealth officer of PPFAS Wealth, told Mint that over the years they had encountered many such cases of abused from their mutual fund customers. Now they want to go a step further and a Wealth Management Division begins to resolve these issues. The game plan is to repeat the core philosophy that has driven their fund management company over decades. Also read: Parag Parikh Mutual Fund Buy Coal India: Value or Fall? “While clients were looking for financial doctors, they usually encountered financial chemists who tried to heal through the medicine they had in stock, rather than the medicine best suited to the customer,” PPFAS Wealth said on its website. “PPFAS wealth is aimed at being the financial doctor who will prescribe the solution for the client.” Edited excerpts: Why is it starting now? The idea of ​​starting a wealth management division comes three years ago. Our mutual funds have gained a traction, and we have built up confidence in the course of seven to eight years. Some of our clients happened to come to us and showed their portfolios. We suggested a few things, but we may not give advice because we were not registered as advisors. However, they wanted us to manage their entire personal finances as they trust us with their mutual funds. We also noted that many people have unconsciously invested in locking products, and that some portfolios had crazy hidden fees. That’s when we thought we should start our own wealth management division, according to the same principle of transparency as we used in our mutual funds. What distinguishes this wealth manager? We will charge customers directly and not with the product manufacturers. This ensures that our interests are in line with customers. People hesitate to pay pre -money, even if it is a small amount compared to the built -in fees that have many products. Honestly, we are not in a hurry and want to grow responsibly. Many things can go wrong if there are selling targets. I think, one key factor that will help us succeed in this business is not to have targets, and we do not intend to turn. We have also never had a sales goal in our asset management company. What is the structure of the wealth management business? We had a long time a portfolio management services (PMS) license. We will offer our advisory services via the PMS license. We will do this via the non-discretionary route. It simply means that when we want to take any action on the portfolio, we first notify and decide mutually. We are also considering the registered investment advisor license, but the PMS license now lets us do whatever we want. Execution can be done at the end of us or the client; The choice is theirs. What is the fee structure? We will provide for individuals or families with a net worth of £ 10 or more. This excludes physical assets and things like real estate and jewelry. We want an eye -catching view of their portfolio and giving holistic financial advice. Also read: 5 Key Recording of the PPFAS annual Unitholders’ meeting If we do not have the expertise in dealing with a certain situation, we would suggest that the client get help from one of our partners. Although we will monitor and ensure that the client gets the right agreement, the client will pay the third party directly for such services. We will not get references or anything out of this relationship. The billing will be between the client and the service provider, but we will help with all other aspects. To give you an example, if we say a customer to buy property insurance, we will not sell any other type of insurance product. Net value is also not the only measure of fees. We ask based on how much work goes into the portfolio of a client, which is to some extent subjective. In fact, five clients have come to us, and we told them that they have very simple and good portfolios and we do not need now. It is almost impossible to create boxes with different fees because everything has different needs, and we adjust them accordingly. When we sign agreements, we tell our clients in advance for which we will charge three to five years. We want to make clients visibility about what we will charge for these years. Even if the asset under management (AUM) rises within this period, we will only take the flat fee. Our most important task is to sort out the portfolio for the first year. Then we do not want to meet with our clients every week, just as you do not hold a meeting with your doctor every week. The less you see us after the first year, we believe it is better. If there is anything, come up new, we will come to the table again and discuss. The people behind PPFAS wealth? Although I worked in the wholesale banking team and the director of Bank of America was until 2024, PPFAS was for my family. I have been married to Neil Parikh for 13 years and had the opportunity to communicate extensively with Parikh and understand his ideology. Jayant Pai, our financial planner, only joined PPFAs in 2005-07 and rejoined us in 2010, and has been with us ever since. He used to be the head of marketing of PPFAS AMC. Rohil Gandhi, who is the chief officer and fund manager responsible for research, has been with us since 2018. He was an earlier part of the research team of the mutual fund. For now, we have eighteen people who work in various departments in the Wealth Management Division. What is your philosophy for wealth management? We consider ourselves financial doctors. A doctor identifies whether something is wrong with your health and recommends a prescription. If they do a good job, you don’t have to go back to them. We offer a number of services, as many things in the financial life of a person are connected. Of course, investment management is at the heart of what we do too, but we also have things like insurance, taxes, succession planning, philanthropy, etc. We want to simplify the financial lives of our clients. If someone wakes our client in the middle of the night and asks about their finances, they should be able to put it in a piece of paper. We also want them to enter a product only if they completely understand what they are doing. We don’t want to end up in the fringe -things like Taylor Swift or Coldplay tickets. That said, we are in contact with Concierge services and connect our customers if they want. Also read: PPFAS AMC: What is the latest five stock choices also reveals, some things don’t make much sense, even if you have a lot of money. They may be too complicated and have a low probability to work out, although it may sound exciting. One thing we want to do is simplify the financial lives of our clients. We have seen that a simple portfolio is a very complicated one. If simply boring, we may not be the right advisers. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Wealth Management #Wealth Manager #Mutual Fund Mint Special