When Asheesh Chanda started Kristal five years ago, little did he imagine that his journey to redefine the private wealth experience of clients would lead him to discover an opportunity that was more scalable than just advisory business.
Wealth management is a low margin business. Investors don’t pay a lot in fees, but expect a very personalised service. Hence to make the economics work, a single advisor manages multiple clients. But this is not scalable. Also clients are increasingly demanding a digital interface to their investments. Given low margins and low tech skillset, many advisors are finding it difficult to meet client needs and grow their AUM. This is where Kristal’s ‘Shopify’ strategy comes in.
Kristal aims to build a comprehensive wealth practice management suite that will offer wealth management, CRM, sales management tools along with client-facing apps and website functionality. So anyone who wants to start a practice would just need to visit Kristal and in just a click they will get their app and website up and running along with the best features to invest and manage their client’s money. Kristal believes that it will free up time and resources of wealth managers for them to focus on sales and not worry about ops and tech. Wealth managers are thrilled with the proposition.
The initial seed
As Asheesh was trying to open a private wealth account for himself in 2016, he discovered that even after having a few millions in his bank account, he couldn’t get access to the best products and advice at the bank. Why? Because he was a million short, in other words he wasn’t “rich” enough. Some frustration, some anger and after, maybe, a few rounds of beer he realised that there is an opportunity to change something for the better.
He discovered that there is a segment of investors who are stuck between retail and private banking. They want something more personalised and of high quality than what they get in retail banking. And to meet their needs, Singapore-headquartered Kristal came into existence.
Reducing the barriers to entry for investors, Kristal facilitated a transparent and seamless experience. One could get a private wealth account for as low as $50,000 as compared to $5 million at other banks. It also built a powerful Robo to advise HNI clients. The offering was lapped up by affluent investors. Within five years, it amassed 20,000+ clients across 20 countries. But then India happened.
Business and more
Early 2020, Kristal entered the India market and launched a similar product it had in Singapore. But it encountered a new competitor i.e. a personal financial advisor. It realised that competing with one big private bank was easier than competing with thousands of personal wealth managers and advisors. These advisors had, over the years, earned the trust and confidence of their clients. This trust was so strong that it would take Kristal years to win clients away from these wealth managers. Hence it closed its B2C business and decided to join hands with wealth managers instead.
Kristal launched its Channel Partner business in mid-2020. It believed that combining the trust of clients that wealth managers had, with the tech capability of Kristal would help it grow. The hypothesis turned out to be true. Within 12 months of launch, Kristal has been able to partner with more than 180 leading distributors and advisors who manage around $10 billion in client assets.
‘Shopification’ bodes well with the mission of Kristal. It wants to democratise private banking and get institutional products within the reach of many investors. By solving the business problem of wealth managers, it will attract more partners to take its product to affluent and HNI client segments in India and beyond. So don’t be surprised if you hear from your wealth manager soon, asking you to open an account on Kristal.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)
