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For a financial advisor, picking investments for clients is simply not enough anymore, thanks to the rising popularity of robo advisories that provide financial advisory services based on completely automated, artificial intelligence (AI)-driven software with almost zero human intervention. 

Would automation make traditional advisors redundant? That is a discussion for another day. Right now, it’s an opportunity for advisors to adopt the new-age tech and develop deeper relations with clients, something a robot cannot. This also touches upon the idea of ‘holistic financial planning’, which has been around for quite some time, but only started to gain momentum in India in the past few years. In future, this would be the biggest value add of an advisor. 

Now, in order to go beyond just cherry picking investments for a client, managers or advisors would need to empower themselves with technology and smart management tools to maintain their portfolio efficiently and also draw insights and analytics to plan and grow the investor’s wealth.  

This brings us to Actlogica, a Zerodha-backed wealth and investment management platform, that has launched two B2B SaaS products — FinFlo Enterprise and Investa — for advisors, fund managers, and intermediaries. 

Founded in 2016 by husband-wife duo Ameet Ayare and Archana Anoor, Actlogica focusses on streamlining the process of advisors by synergising technology and actuarial mathematics. 

“Majority of advisors in India, even to date, continue to operate on excel sheets to manage their client’s portfolios or have been using age old platforms that have not been modernised for years. You cannot achieve efficiency at scale with them. Tech needs to be upgraded. Besides, the idea of holistic planning cannot take place without sound tech and deep analytics,” says Ameet, who worked with various IT companies for over a decade following Master’s in Information Systems for Financial Services from Edinburgh, UK. 

Both Ameet and Archana worked in the UK before moving back to India. A qualified actuary, Archana has close to 14 years of experience in insurance, pensions, and investment domains. 

Synergising tech and finance 

The idea to bring technology and actuarial together has been on their mind for many years. Having an entrepreneurial mindset, they had started exploring the Indian financial market, and understanding how processes take place across stakeholders, and the potential gaps. 

Their first attempt was in the insurance space, where they built a product modelling software prototype for life insurance companies. Actuarial teams could use Actlogica’s UI to build a mathematical model for life insurance products within minutes (which otherwise might 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.

By 2017 end, the founders turned their focus towards wealth management as they started to research and closely interact with advisors, fund managers, and brokers.

“We started gathering first-hand feedback from intermediaries, including large family offices and wealth management firms, and realised the gap on the B2B side. Apart from managing the funds and bringing transparency in portfolio management, it was about harvesting the returns and building a tool that would cater to all of this,” says Ameet. 

The beta version of FinFlo was out by September 2020, and the first client was onboarded from Mumbai. 

The startup was also a part of T-Hub’s Incubation Program, Lab32. 

What it offers?

FinFlo Enterprise has been built for both advisors/wealth managers and the investors. They can place orders for investing in mutual funds, stocks, ETF, REITS, INVITS, and Bonds (will 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 analyse PMS and AIF as well. 

Providing these metrics on a report would normally take hours, if not days, for the investment managers to calculate, informs Archana. 

“We keep adding new instruments to the platform. Our goal is to ensure the user is able to place orders, settle, report, and charge fees (in case of RIAs), all in one place without having to do it in multiple systems,” says Ameet.  

On the other hand, wealth managers can segregate investments into multiple portfolios, each with their own performance reporting, asset allocation, and accounting. They can draw taxation reports besides other analytics. The software can be used by asset management companies, investment managers, wealth managers, alternative investment funds, investment advisers and custodians. 

Actlogica also has a partnership with a UK-based process improvement product and consulting company with specialisation in asset management. They licence FinFlo’s RPA engine and integrate it within their software.

The second offering is API-first mutual fund CAS analysis and reporting software — Investa. Anyone with a consolidated account statement (CAS) can instantly upload, analyse, and generate a performance report for the investments in the CAS file. The software follows the pay-as-you-go revenue model, and the fee starts from as low as Rs 10. 

“We’re building an ecosystem of software tools for wealth management that are interconnected. The first, most complicated, and the most important one is FinFlo. We’re now going to add to this ecosystem a bunch of others such as Risk Profiling, Planning, etc. These can be plugged into each other to create a customised version of the software that can cater to business needs,” adds Archana. 

Competition, market analysis, and potential 

There are a slew of B2B wealth management softwares and individual tools available in the market. Most Portfolio Management Service (PMS) in India use a software called Wealth Spectrum, which has been in the industry since 2001 and relatively licensed on the higher side than its peers. 

Other popular names are InvestWell, IFA Now, Wealth Magic, MProfit Advisor, and so on. These are more economical offerings. 

Though Actlogica claims to have priced its products on the basis of costs, it is aiming to establish itself somewhere in the middle of the premium and economical category and keep the product affordable for both small and large customers.  

“Our major USP is tech. We are a pure tech platform and would like to keep it that way. We curated unique features based on what our target audience needs. We have a wide spectrum of customers, meaning, our users currently handle as low as five accounts to 10,000 accounts on a single platform,” he adds. 

Also, a lot of platforms/technology providers charge a percentage of AUM the advisory manages besides the licence cost. FinFlo is not looking at following this model and will charge only for the technology. 

Though still low, investor participation has dramatically increased since 2016. As per information provided by 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 Advisors (RIA), out of which mere 200 odd RIAs do holistic financial planning and advisory.

It’s an expanding chain. As the number of smart investors rise, so does the demand for advisors and need for sophisticated tools to serve clients better and also 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 Rs 3 crore in Seed funding from Zerodha-backed Rainmatter Capital. Interestingly, Actlogica had caught the attention of Nitin Kamath, Founder at Zerodha, through one of its potential clients. 

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

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

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

Future plans 

At present, the startup serves nine clients, 70 percent based in Bengaluru, and has around 2,000 crore worth AUM. The number of client accounts have grown from 97 to 11,200, along with 100 percent year-on-year (Y-oY) revenue growth. It has a remotely working team of 21 members consisting of permanent and contract employees.

“We are looking to close the current fiscal by doubling the revenue. We would soon be launching a PMS fund account management tool. We are also currently brainstorming to offer premium investment management tools to lower ticket investors, including retail,” Ameet says.