2. The Real Playbook for Building Serious Wealth in India | Srikanth Subramanian | Paisa Vaisa

I V M Life may be something First thing is very important First memory, first love, first heartbreak, first work Friends, I am Gopal Dutt And this is my first podcast First first with Gopal Dutt Which will be released on IVM Pop I will talk about those crazy people who will see their own work Who will know all the names of them So come to my Youtube, where you listen to the podcast on IVM Pop channel Listen to my podcast Meet interesting people First first with Gopal Dutt Folks, welcome to person, I am Yosana Bhangupthar And on today's episode I am talking with Shri Kansu Damanyam co-founder and CEO of Ionic Weld We are going to do a deep discussion about wealth management The industry, what is happening there Our strategy is for how you can handle your own portfolios And much more And folks, as always, like, share, subscribe to get notifications Whenever it is episode's drop And always comment Whenever you have a point of view If you like episode, you don't like episode Leave a comment for us so we can learn from that Let's start this episode right now I wanted Ionic wealth for quite some time Because it's a very interesting thing I, you know, the more I read about it It seemed interesting that within Angel Farm You could have something like this, but We shall come to that Tell us about yourself Your background, your journey And then we talk about ionic wealth Sure, firstly, thanks a lot Anupam for having me Look, I've been career financial service guy If not a career banker But 23 years with an established firm 18 or 17 out of those 23 years Cut my teeth in the domestic private wealth practice And went through length and breadth So one of the few guys in the industry Who moved horizontally within the wealth space So usually you'll have people who are exceptionally deep rooted in one particular function Be it relationships skills, be product, be it advisory I was one of the more fortunate ones That opportunities came knocking And I kept taking them So started my role on the product side Move back to business Combined product and business Move to strategy And international business And finally culminated into running the overall private wealth advisory practice For one of the larger established firms In addition to that, I also used to run The global wealth practice for that firm With offices across the world And towards the last two, three years of my stint in the 23 years career I also want fortunate to see How we can use technology To aid, take the same products and take the craft To a newer set of audience across the length and breadth of India So started with a simple journey of a sunrise industry called insurance Quickly into six, seven years moved into private wealth Love the idea of capital markets Speaking to investors, deconstructing portfolios for investors Minimizing information arbitrage That stuck there for about 18-19 years Still continue to do so But I've been fortunate to see how wealth changed in India with the last 18-19 years International wealth experience showed me how best practices internationally At a point of time would be brought back to India And the last Indian technology was the genesis of what we then started doing in Ireland Which is how do we at some stage integrate the two So that's been that's been the journey for me so far I only want to tell us about it Why Ionic first of all, I mean I committed with atoms and electrons Actually yes, you know, but instead of just going after a fancy name We did a more copy book style We said look, let's rediscover ourselves, what do we stand for? And even if it meant that we go back to cliches in terms of First putting together what are soulless, what are purposes And then moving towards what should be stand for in terms of value prop The name actually came pretty much in the end Because we said once we know all of that And short-listing the names were fairly easy Sort of all that we sort of brainstorm One thing that stuck with us is the journey of wealth Is very collaborative with nature And one thing that sort of stuck with us and that's where we emphasize a lot in all our deadlines And all our campaigns is Can we mean some sense co-founders to our investors wealth creation journey It was auditions because co-founders has different connotations, different meaning But we somewhere wanted to call that out And wanted to also pick the interest And also we also realized that calling out is one But it's a highly responsible statement to make Because falling from such a tall claim is also equally risky But we went ahead with it We said while many can claim including us And including many other potential competitors in terms of competence In terms of longevity, in terms of great partners, great team, great products But what we really want to do is can we hand hold everyone who trusts us In terms of managing their wealth And in some sense also the co-founder would help us to push the message across They don't treat your wealth lightly Treat it almost like another startup And in many cases the kind of families that we used to deal with In many cases that personal wealth was equal or in some cases even bigger than their operating wealth So in the operating company you have so much to take care of That operating wealth in terms of team, structure, company Private wealth was usually relegated to multiple wealth managers And you would just meet once a quarter, once a month And it was very cursory So idea was also to put some seriousness back to creating the wealth So once that idea stuck with us, we slept over it, we came back We start feeling good about it We wanted to take deeper So that came the brand purpose that also allowed us to put our value proposition After that it was easy, there were a few names that stuck out, Sharpa was one, Ionic was one Ionic also had a bit of an edge to it It had a little bit more progressive inch to it in terms of tech And yes, you're right, Ionic also meant ions and atoms which sort of stick together And that's also what gave shape to the logo Which essentially is two circles who can be like two co-founders Angel, one tell me about that, because this is part of Angel 1 Although when I see the website and when I see the branding and when I see everything It's like Ionic is its own brand, its own identity And you found also I have a very very different background versus something like an angel Which is managed by founders, he's probably among the very few guys on the brokerage side Who got the tech wave really right So just maybe a couple of lines about Angel's presence and how you guys Look contrary to what many perceive this kind of partnerships It was us who actually went to Angel 1 because we've been We've been awestruck in terms of how Angel 1 kept reinventing itself And kept breaking every notion that was out there And coincidentally and serendipitously for us At that point of time they were looking at setting up their own wealth We had a certain outlook in terms of how we wanted to set it up So while this is a wholly on subsidiary at this point of time But there is enough skin in the game for the three co-founders which is us And the larger team over a period of time But in a working style, it works as a strategic partnership Where Angel 1 comes and backs us not only with capital But all other technical know-how, be it access to customers within the norms and regulations As prescribed, be it access to technology So I thought when we looked at it and we said look if we can independently build this And we all collaborate where the best practices come together There was magic left to be seen and 2 years out I couldn't have been more lucky that not only lineage but also Angel 1 Seemed to be the right ecosystem for us to build it Before we get into the details of this entire thing AI and tech and all that I want you to give our audience just a very broad and short overview of wealth I mean I don't know how you guys think because this is the hottest possible sector for the last post pandemic Let's say for the last 5-6 years teams have been set up AUA's assets under advisement have just exploded Even though optically when you look at the Nifty 2 or Novaya for the last 2 years But obviously this is a field that's really moving See, we are SIP kind of people So when we see this kind of wealth being created It's just out of curiosity on the outside What is the size? How many people are there? How many families are there? We have income tax, data, we've got all sorts of stuff And the number that just gets staggering and staggering 100 families of 1000 crores each and it becomes like one layer So how do you guys map this in terms of the total size? Because the wealth management industry has now got pretty much everybody And probably a few more lined up to jump Right So let me really get it and I'll simplify it for a point We somewhere cut the pyramid into three So on the top end of the pyramid which is far more narrow What we also call as the ultra-high net worth for lack of a better word Some say it's about 25 crore net worth, some say it's about 50 crore net worth But give or take, that's the range That let's say in a broader range, 25 crore net worth and above net worth Usually required much more bespoke services Because with absolute amounts of wealth going up Your requirement complications also go up You will look at succession as a scope You will look at asset allocation, diversification Not just within India but also globally You may have a slightly broader family where each one of them will bring their own color. So that model continues to be run in a very bespoke way. And for me, for example, in my background, bulk of my time I've spent in that in that corridor, which is the ultrion it was. So that was one piece where there were incumbents doing extremely well still continue to do well. And that was a piece which your traditional private banks, throw wealth managers have been catering to. Then the bottom man is, let's say for again, lack of a, but if I give a range, that's a 0 to 1 crore network. So if you stay with me for a minute, the top end is 2550 crores and above, bottom end is 0 to 1 crore. And middle is anywhere between 1 to 25, 1 to 50. And I'll come to that in a minute. But if you look at 0 to 1 crore, over the last half a decade or so, the technology companies had been crazily successful, whether it is giving first time investors their new folio, first time investors their new demat, giving them quick access to invest into financial services, the whole concept of financial inclusion. So the counterparts of the pure private banks in the top end here as the frintex, who on the 0, 1 crore through the DIY journey, etc, etc, with high frequency latencies, with great UI, have made that access across multiple geographies in India, very accessible. So I think these two we thought were reasonably well, it's never fully exhausted, but it was reasonably well catered to. That left the whole middle piece jostling somewhere because there's 1 to 25, 1 to 50 is a very interesting piece. While it's a large piece, but it exhibits towards the initial part, more like a DIY investor towards the end part, it exhibits characters like a bespoke. But if you take all of them, they didn't have a dedicated calling card for them, the private banks were too busy at the top end, frintex were too busy capturing the large which now often repeated what called demographic dividend, which I think everyone uses it. So frintex were and the middle investors, who's only issue what they didn't have time, because mostly these were salary people, getting good salaries, good e-sobs, good bonuses. So they were extremely busy Monday to Friday or in many cases Monday to Saturday. So they didn't know where to go. So most likely the custodians or their bank accounts or their brokers or they would just double up as wealth managers. Now there are multiple reports, there's a BCG report, there's a cap germinary report, which gives certain data, but suffice to say almost 80% of India sits in the bottom end. It's not more than 70,000 to 80,000 families are on the upper end, and your beach cup portion, which is what we call as the middle belly, give or take and each one of us can have different assessment, but let's say we'll be a million to two million households. Now there are two parts to it. One, we had coined this word called triple multiplier, one of the reasons why wealth became such an interesting spotlighted industry. And second, how do we look at wealth overall and how do we sort of segment? What the triple multiplier effects say is that there are three distinctively and uncorrelated growth opportunities because of which the market was going in, wherever investors have already invested in equity, debt, rate, commodity, etc., by and large they were growing at a particular rate. Let's say each year depending on good year, bad year, but on an average anywhere between 8 to 10% their assets were growing portfolio. Which itself was adding to the base, so 100 rupees was invested in various instruments, 100 was becoming 108, 109 depending on nifty, depending on fixed income, blah, blah, blah. So that was one piece because of which the market was growing at 8 to 9%. Second, the number of investors that were coming into first time wealth full was also increasing by about 5 or 6% each year. There were multiple new investors who were coming into the fold and they were they were not available previous year. And on top of that, each investor who had already invested, so let's say if you were doing an SIP of X, next year you get an increment, next year you get an X, you will make it X into 1.2. So your capital was also increasing and all these three are mutually exclusive in their own way. So many people multiplied. You know, add all of that, all the triple multiplier effect. It adds up to almost or 20, 25% CAGR growth. At 25% CAGR, market is doubling every three years. That explains a boom. And that explains a boom in some sense. And on top of that, you got the great India tech stack. You got things like mutual fund aggregation platform like MF Central, like other aggregators. You got DeMAD account aggregators, like account aggregators. You got frameworks like accredited investors through which people can get access to multiple products at lower thresholds. So in one end, you had technology which has been knocking on the doors to make products available and accessible. On the other end, the regulator wanted more and more people to come into regulated organized financial inclusion space. And on this side, because of a healthy economic boom, you had market growing at 24/25. So when you look at all three, any smart money will look at this trend and say that it is chasing. So when you lift the veil of cynicism, which is right now we are going through because so much money has come. There was a reason for it. Everybody saw this everywhere. Where things may go right or wrong, each one will follow their own strategy. Some may get it right, some may get it wrong. But that is true to any industry. That is on one side of the industry. What we understand very well is if I split the pyramid the way I mentioned, zero to one crore, for example, angel one understands extremely well. On case by case basis, need to need basis. We can always power products, solutions, knowledge, because as a well thought fit, doing deep research competences, second skin to us. But one crore to 25, 50 crore segment, we are trying to target through an omni channel presence, which means even if we can't from an economic model point of view, afford to have boots on the ground to service this large set of growing emerging H&I's, we are also finding them fairly native to use technology. And I'll come to that in a minute, but a recently launched institutional grade AI called Ion Equal AI is the first such attempt where we are now putting the power in the hands of these investors to say, look, we are no one to call what is right for you. And the one thing that we keep in mind is we don't like to preach. We say, we will give you an RM, we'll give you a tech, and we'll give you the power to choose, you want to use 100% tech, tech is unable to do that. You want to use 100% RM, RMs are equipped to do that. You want to take some transactions online, some transactions, you need to talk to RM that we do. And that leaves only the last segment, which is the 50 crore plus, that for us was very easy. We've done that for a long period of time. So when a lot of high quality private bankers move, a lot of investors move with us, that business gave us the initial sort of thrust and that continues to grow for us. So let's go into that, the point that you mentioned about the platform that you're building, right? Because I remember the early days for the longest time when the mutual fund AMs of being built, that required distribution. You had a lot of distribution coming up. Then in the mid-2001s, the regulatory side was handled and we see money came in the mutual fund platform business came in, which is the tech. Tell us what you're doing, right? And look at it from the perspective of how you would tell someone who comes to you, someone who's watching this episode right now. How do I sign up about that manager? What are the three things that I should look at, you know, whether it's app, whether it is tech, whether it is the presence of a distributor, that's where should I put that? Actually, and here I'll talk only about the 1225, or maybe 0 to 25, let's say. Sure. I'm sure that's there. But you know, in some of these, while quality of the people or resource may change, but the answer is still the same. The two important factors that does not change is your own comfort and competence. I just clear it in a minute. Comfort means in a human parlance, you are going to talk deeply personal stuff, you want to create wealth over periods of time, you want to be freely able to talk about your compulsions, your ability to live a particular lifestyle. So you need the person on the other side who understands you deeply, doesn't judge, has been there with you for a long period of time, understands your family, understands your temperament, that's where they're comfort. In the context of tech, the same job the app has to do. The app has to be subservient to your requirements, where the app instead of telling you giving you intuitive nudges or giving you intuitive UX, a truly high quality wealth that needs to behave like an RM that you are at the service of the investor. When you push a button, the work has to happen. When you ask a question, the answer has to come. So the comfort part is the same, whether you go through a technology route or through an RM route. The other thing that I find sometimes a little bit of a rarity because a lot of people don't ask this question, look, it's still a knowledge business. You don't go and choose a doctor without asking about the doctor's competence, how many surgeries has he done, who has he referred to. In our industry, that question is slightly more rare. People are more pitching their skills on comfort, their skills on lower cost or some of those things. But as an investor, you must figure out a way to say that the person you're so choosing or the platform that you're so choosing has to have equal amount of comfort, unless and until someone has seen enough number of booms and buss, enough number of extreme situations in the market. When a crunch time comes, how will someone who knows himself or herself not experienced, be able to guide you. So the two common answers that will remain, whether it's for the 0 to 1 or the 1 to 1 for anyone, will be comfort and competence. Now, the tools change in a higher end of the market. These are purely human, this thing. In the 1 to 25, it could be an omni channel where, when you look at choosing an RM or a wealth outfit, these two still continue to be the most important parameters. If you have to choose an app, you're not going to choose an app, which is very click baitish in nature, which is very highly propensity in nature. Those are vertical businesses. See, also one misnomer in this industry is that which in the offline world still doesn't exist. People in offline world coexist. There are product companies which focus on a particular product or a particular service. Neutral fund or AMC is a single product company. Portfolio Management Services is a single service. AIF is all about focusing on one product. Broking is about a single service. So when they pitch their service or a product, they're absolutely right, inputting a lot of focus on their product and their service. But when you choose a wealth manager, wealth management is a horizontal. All these have to sit inside a wealth manager. A wealth manager cannot comment say, "Aap, hajiye kharidye." They do, but they shouldn't. "Aap, hajiye kharidye." That's what they do. A wealth manager, the whole equation should change. They say, "Aap, hajiye kharidye." What are you feeling like? What are your temperament? A salver is a little bit expensive. It's not a little expensive. Once you tell me all of that, let me go down in my bag and tell you what's your solution. Right or wrong, buy and large offline world still understands the difference between a wealth manager. A stop broker or a mutual. Online world, there is still some lines that have blurred. We bunch up many people together and call them wealth tech. It's also maybe far more glamorous, what to say. But we call many broken firms, wealth tech. We call many mutual fund companies, wealth tech. And we call wealth tech, wealth tech. But if you understand the difference between the two, that if you go to a product or a service provider, you choose their product or their service. They will give you the product that they have the best and the service they have the best. When you go to a wealth manager, you have to get the wealth manager to work for you. If you understand the difference and basis that you can get your comfort and competence, it's absolutely fine. You know that feeling when you finish a movie and you just need to talk about it, that desperate need to discuss why Kalhunaho hits different. Enter IBM's brand new podcast, Signify. It's creamy and current just yapping over Hindi cinema every Friday. romcom's directorial debut is career defining moments. Whatever they're vibing with, they're breaking it down. Join the podcast on IBM Pub's YouTube or any audio streaming platform. Caution, you'll want to rewatch everything after listening to us. Come join us on Signify. That's what, you know, so you've given me the lead into this question, what do you offer? Right, because I look at it this way, that a lot of people who are new to choosing and advisor for their money. Okay, well, I'm now let's just talk about people who from DIY now have finally realized the boss of VMware is the new one I like. Okay, because the DIY phase is there. People do different roles from different people. X is bank account, Y is mutual fund, A is insurance, B is loan, C is whatever whatever. Yes, so you go through that grind, you know, you're 25 years old, you've got your first salary, someone is telling you start an NPS, somebody saying take insurance, somebody saying start an SAP, you do that obviously because you can't go to a well manager at that point of time. It doesn't make sense either for you or for the well manager too. Okay, now 10 years later, let's say that I'm finally, you know, I've reached the threshold that well manager will take me seriously till some point that also was a bit over this, but let's say that's happened. What are you all for, right? And how does the journey feel to me as a customer? You know, and what are you replacing? Like I should do this from 10 different people. So how are you helping me? Let's talk about specific services. Sure. How do you make my life easier? Yeah, just before that I'll maybe add one rejoinder. See the magic of tech case, tech doesn't differentiate between a one core customer, a 100 core customer or 10,000 to be customer. So the first great leveler that many of us are starting to realize is as more and more fractalized options are available, so if you're an accredited investor, you have PMS and AI available at a much lower threshold. As a basket of mutual funds or the new consultation paper that say BS come out with, which is a MF only PMS and if the threshold is dropped, you can now do multi asset allocation with a much lower threshold. So I think the one trend that we're to keep in mind is what was true as a myth, not a myth, but what was true as a fact five years ago that a person cannot afford a wealth manager that itself is going to get tested. So one of the beauty of technology, powering wealth as a space is wealth as a service is going to be available for many, many more people than what we imagine. Today, I think people are still happy playing in the middle or in the top, but people like us and people many, many more such people are using technology to say, can we take this craft to a much wider audience? So that's pointy. - I mean, sorry to interrupt you there before you go to pointy. The reason why I mentioned that, first what you're saying, I hope what happens in the future going forward. The reason why I'm saying this is because, you know, two, three years ago when the market was doing really well, of course, now it's a different scenario. You had this thing about how, and I say this because I used to get so many queries that I found out. You know, you get so many guests on your show, some wealth manager, and then, you know, they would land up with somebody and that means nothing but a product distributor. He could be X, Y, Z and a very big band, a very big wealth manager. Kumferake, he's just peddling his products. One year later, performance has gone, then the guy comes over here, you know, he's got a name for me. And when I talk to that guy, saying, "Why did you give that service?" He's, that guy actually told me, and this is real life. - I'm very sorry. I can't service people with that portfolio size. So you tell your friend to go somewhere else. Come on, yeah. Now, you're saying sitting here that wealth as a service is going to actually come better and better, more democratized. Let's hope it happens. Go on, you know, just. - No, but in fact, let me put the horse before the cart. And I'll take advantage of this platform that I have to also invite everyone. Today, for example, for the last one week, the Alanik wealth AI that we have launched does not ask you for any minimums, et cetera. It allows you to fetch your mutual fund and stock portfolio through. - And there's real cash for the platform, there are different text tags that we have used. We use a counter-aggregator for a DMAD, we use MF Central for mutual fund. - Pull all the data. - Pull all the data. - Of course, on your consent, so everything is being done basis, your consent and I'm assuming. An investor will only give a consent if he or she believes that there is value on the other end of the trouble, right? So once they do that, our AI is not crawling open source LLM data and giving you a generic answer. In fact, we only launched our AI when we were confident that the way we have trained it is that while it uses the open source LLMs, but after that, it is trained to give you answers, which is contextual to your portfolio. And it has been only and only trained on the institutional house we offer. So I'll give you one example. Let's say, real life example, if you do a little bit of a role play, I'm sitting in front of you, you're a client. Normal question after extending pleasantries, you'll say, "Hachavi, Bazar, Kyalakta, "and my portfolio, what can I do?" But by and large, to cut to the chance that I was, then I'll, if I'm true to label and if I'm not a product distributor, ideally, I would actually tell you what my institutional view is and that's where the competence part comes. And I said, "I know, we think that we're better." We had some of the best quality brainstorming in the thing thing. And according to me, Bazar, "Tik lagra, Thodas Afilbe Stagar, Karthaya, Lamsam, Nailetay." And large-cap mid-cap 60, 40, Dikta. India, non-India, 70, 30, Dikta, for example. Read in mid-strong, lagra, gold, Thoda, Tik lagra, Yagolka, Rally, Khadamogya, fixed income, Abhi, inflationary environment. This is how I'll, because I'll say, if you broadly agree, if you're an informed investor, you'll go level two deeper, level three deeper. Once we all reach a consensus, you'll say, "Okay, Abhi, plan." I'll say, "Yeah, yeah, yeah, plan." On your existing portfolio, we shift from a point to a point on your fresh cash, we will do this. - Do this, yeah. - And I explained to exactly do that. - That's it. - Yeah. But the reason why we at all points of time give a tab to say, "Call the Arat," is we also expect that inertia is a very big thing. There is no reason for you to trust me, just because I am saying that this is how it is done. So that's one decision we took. As a, let me build trust the hard way. Let him call my RM, let him get the last mile comfort, let him see that there is validation from an experience guy. But the way the service is already being disseminated, is the answers are completely contextual to you. Sorry. - Okay. - And not only if you ask the question, Even if you ask an open question, ki mujhe niftikyo par ek view do, Example. It is trained to give or it'll say on a particular mutual fund, ki give me a view on a particular mutual fund. It is trained to give you an answer A, which will first give you a generic answer and then say, and once you're asking this, I notice you don't have this in your portfolio. If you're looking at this, up, ye portfolio may add karene kye le yaha se nikal kare kye yaha lasak. That's a very simulated conversation or how you will have with your mutual fund distributor or with your advisor. Of course, I'm simplifying it in the form of a conversation, but we also operate with all relative licenses. So depending on how the architecture of my relationship with the investor is, if the investor comes to me in a simple distributor framework, then whatever I'm allowed to do offline, I'm a I will do online. If you sign up a digital advisory and come to us online, we will give you advice in the same manner that I'm all your data is under the DPDP Act protected. So it is not that going online or offline has got any arbitrage, to any regulatory frameworks. So in reality, according to me, not only do we individually as ionic, fancier chances, but I think this gush of organized capital, which is giving rise to so many wealth players will ultimately do two good things. There'll be a lot of unfortunately not so good things also, because when so much money comes, it's always tell people that you do a lot of physical care. When you have someone who has lottery or free money, so that is the time you go and buy stuff which you'll otherwise never buy. Similarly, right now, we're all sitting on abundant capital. So which means the maximum amount of errors and risks can also happen now. But two three things which will happen is a new talent is going to get trained. And it will do very well for the industry because if five or six or seven managers saw a talent pool or 200 talent pool, now if that number of managers is increasing by two X three X, you can't just keep rotating them. You'll have to hide one that will happen to you will figure out ways to create new market. We saw that in broken, we saw that in payments, we saw that in mutual funds for your creation. It is bound to happen that after the initial disturbances that everyone's trying to cause to each other, because that's the low hanging fruit as they call. They will figure out newer cohorts of customers. They will go to tier three, tier four. And once you go there, you'll realize that traditional cost to some economics model is not going to be viable because wealth managers truly have good quality wealth managers won't come cheap. So you'll have to aid with technology in some form or fashion. Now some people can make the mistake of jumping too early and believing if tech can solve everything. Some people will continue to be in denial and say tech will never change anything. We've been trained for a very long period of time to take hedge beds. We believe be there right place, right time, hedge your beds and wait for investor behavior to change. We're already seeing that happen to give you live example in our own app. When an investor logs in from Bangalore versus when an investor logs in from any other city, the ability of a Bangalore and this is intuitive. But I'm actually now giving you data to prove that that more than 50% of their interaction with us has moved on the app from Bangalore. They're just so conversant and their ability to trust an app is very different. And many of them are first time wealth clients creators, right. So they don't have any notions, preconceived notions for them to come on the app and play with the app is very different as compared to a more traditional family, where they still look at some of these digital tools with a major suspicion. So why would I want to make a binary call the way we built it is our technology is built to service you into it. Our RMS are equipped to service you into it, but we leave the choice or knew if you integrate them and take the service, but I think as you keep giving your tech or your RMS and he or she and the tech is very contextual to you. Trust just compounds and people like us. One of the reasons why we felt we could move out and do something of this magnitude is because with many families, we are on their third generation. And it's not that every time you build a relationship by only giving returns, sometimes a relationship is so strong, the trust is so high that everything else becomes secondary. It will happen with tech also, that if all your questions are answered, basis to what you think is right, the journey is never broken, the latency is always there, you get the answer when you want, trust is going to multiply you. Okay, so before we go into the break, just just last question, I want to just decipher and make it slightly more approachable for our audiences, the products part, right. We just explained to us that you have all licenses. Someone out there who's watching this could say, I just want to choose mutual fund, which means that you're a district. So you've got the MFD license, which allows you to sell mutual funds to people, we just walk through the services that you offer. So that our audience can understand what exactly you do. So you would know that the first question that keeps on coming is that, yeah, he's just trying to just walk us through that. So both from license and product point of view, we are a full service shop from a very simple requirement and nothing wrong with it. If 100% mutual fund selection can solve your problem, where all you're looking at is a good, nice passive allocation to a well-regulated pooling vehicle called mutual fund. We are fully equipped to do that. If you want to stretch the boundaries and say, look, I want to understand how PMS can, if at all, can they give better returns, AIFs can get better returns. We are very well equipped there as well. So we work with various PMS managers. We have our own PMS as well. We have our own AIF and we also work with our managers on top of that from an asset class point of view. We have competence, products and available access to mutual fund, direct equities, private equity through funds and through direct international diversification possibilities, to reach and wait commodity. Now on a product basis, we are very happy to give you as an investor understanding and availability of each of these products. If you want us to build a portfolio, we take all of this and create a single portfolio and give it to you. You want to do a DIY, we let you choose what the products you want and let you go. I will end by saying that think of this in an analogy of a salad bar. We cater to three kinds of customers, the simplest customer who comes and says, look, I think you guys know your job. Just whatever is pre-packaged salad, I will just open the refrigerator and buy, go to the counter, check out and go. So whether it's a company, whether it's a Caesar salad, I don't know anything about it and I don't have any time. I'll trust you guys, I'll just buy the pre-packaged salad, pay and go. Then the second kind of customers, who will come, who will say, look, I don't need you to give me anything. You just tell me, what do you have, ingredients, and you mix and match the way I want. So I'll come and trace my cucumber, a subway model, because I understand everything and my joys, I want to create my own salad bowl. We have means and ability to do that. But majority clients are somewhere, who is the third bucket, 80% clients will be there. Who comes and says, listen, I know a few things. But I don't know all to make my salad bowl, but I'm also not very happy just buying a pack of a bag, I want to check. So they will sit around the counter and talk to an expert. Listen, I'm slightly diabetic, will this ingredient go there or not? I need nutrition. So that is the advisory model where it's in a consultative basis, you create a portfolio which is custom made for you. So three kind of use cases customers can have. If they believe that they know exactly what they want, they can beat our physical team, go to our app, and they can choose what they want and just, or a product by product move out. We have created baskets, we have created mutual fund baskets, we have created multi-acetal location baskets, where we believe that for different risk profiles, different asset allocation themes, so global domestic, read-in-weight equity, equity fixed income, or a full multi-acet commodity, equity, etc. So we have ready-made baskets, or we have a basket which says conservative investor, this is the basket, aggressive. So that's the model where you say, okay, listen, I don't know, but it looks like a great starting point because an institutional company is telling us this is the right thing. And the third is my advisory model, where we come, we sit, we chat, we build a portfolio for you. The reason why I was asking you was only from the fees angle, how much am I paying you, right? So what is the fee structure there, right? So for example, if I'm doing a mutual fund distribution model, then I know, I'm buying regular plans from you, you're getting your commission back. If I'm coming to you as an HNI with my entire portfolio, and I want the RIA service, you're selling me direct stuff, and I'm just paying you fees. That's right. Is that how it works? It has exactly how it works. Also from a misconception point of view, fees and both could be same, could not be same. That's mathematics you can do. The more important point is, do you want your wealth manager to be on your payroll, or do you want your wealth manager to be on the payroll or product manufacturers? And that is the mode question, because if you are my paymaster and you being a client here, more often than not, my allegiance will lie with you. If you're okay with being making commission, but my paymaster is someone else, whatever I may say, technically you're not my paymaster. Once you are comfortable with what approach you want to take, there are different licenses to get you to that. You are right that in RIA, the fees is very good. paid by the customer and everything else comes at a direct cost wherever available, wherever applicable. In a mutual fund distribution, you are just letting me take my mutual fund commission from the mutual fund houses. So folks, as always, you know, do your own research. On that note, we will take a break on the other side. I'm sure all of you are waiting right now. I am at the bank road. How do I go through the 25 crores? I don't know how we can answer that. But we will try and address all of that on the other side of the break. And as always folks, like, share and subscribe, drop a comment. When you do that, when you like share subscribe, you'll get notifications for whenever the latest episode drops. Do not go anywhere, we will be right back. Every one day, I go live with the show, ask me anything, AMA, you throw the questions, I dodge them better than a Mumbai Richard driver. I even host a panel discussion called Cock and Bull, where we dive into current affairs and wonder why anyone even cares at all. And Friday releases are always surprise episodes for you all. So tune in to Cyrus Says on YouTube and all audio streaming platforms. Pahla podcast. Pahla Pahla with Gopaldat, which will be released on IVM Pop. I will talk to those rich people who will watch their work, whose name we all know. So come to the YouTube's IVM Pop channel or wherever you listen to the podcast, listen to our podcast, meet interesting people. Pahla Pahla with Gopaldat. And welcome back. Chilli, Shikand, you just spoke about multi-asset. Why is this happening? Like 5, 10 years over, equity, equity, equity, passive, passive, whatever, everything was so simple. Jump in, why something, nothing, everything takes one more time. Why are you guys doing multi-asset? Why do you believe that multi-asset is superior for most of your clients who has your H&I's and when does a pure equity PM is still makes sense? No, one thing I must say that it's a question, we also do multi-asset. It's not that we only do multi-asset. So, no, the question is fair. Because from a point of view, we have nothing against all equity product, we have nothing against a single asset class product. But if an investor is looking at an experience which is not very volatile or which is not to boring from a return which is underplaying inflation, you'll have to choose asset classes which is not 100% fixed income and which is not 100% equity. So equity from a volatility point of view, fixed income from a return point of view. So normal prudence suggests that if the investor temperament is to have a slightly more risk adjusted return pattern, then a multi-asset class does its job. And in India now, the ecosystem available is also far more healthy. In 2010 or maybe earlier- It will be an existing- Doi to asset class was there, equity or debt. Real estate to asset class was because we all used to like it. But look at how far we've come. Reeds has created a completely new asset class, invades have created completely new asset class, commodity ETFs are new asset class, private equity funds, real estate funds, structured credit funds. But just because they exist doesn't mean you need to do. I'll give an example and I hope that it's not construed by the audience as any form of advice. But in my case, I don't depend on my wealth for my lifestyle expense. My daughter is only 15, so I don't have an impending liability of any nature at this point of time. And I generally, since I come from this financial services background, I have a reasonable ability or so I feel of looking broader markets. So I know 100% equity. And within the 100% equity, I do some tarqa of 10 to 15% of private equity basis my temperament. I am my own philosophy that in a growing economy like India, there should be a lot of good Indian companies to back up. But this is a much more personal philosophy. And I will not do more than X percentage in these. So in a different companies, I have a 10 to 15% investment. But there is so, this thing for me. Personalize for you. Very personalize for me. I manage families, but in the same family, the husband and the wife. I have got very different temperament. The wife is a very reasonable mistake. And the husband is looking at a lifestyle where he is now moving towards preservation. So we move with years, trained ourselves to say that, look, unless and until it's a consolidated portfolio, where I'll have to bring in a little more complication, but if it's individually run, in the same meeting, I have to give answer to you as a wealth preserver to someone else who still is looking to compound wealth. So for us, we are making all solutions available. There are model portfolios. And a model portfolio for an aggressive investor could be 100% equity. A model portfolio for a secure investor could be 10% equity. So for us, multi-asset is just a tool to create a risk adjusted framework. We have nothing against single asset or multi-asset. We generally try to tell the investor, as I have seen the example of three profiles, the ones who don't know what to buy, the ones who can only take multi-asset, the ones who can create portfolio for them. And there are people who will just come in by the pre-packaged portfolio as well. So multi-asset, for us, is nothing but an extension of making sure everything is available for our investor. This next question is based on two things. One, your knowledge of working with a lot of H&I entrepreneurs, even service-oriented people who've made a lot of money thanks to ESOPS, etc. on the one side. You know the habits, you know the wealth, how it was created. And on the other side, your understanding of how products work and what is outlook for India, you just spoke about how in a growing umbrella. Someone watching this episode is like, you know, "Okay, I'm sunk in now, and now you tell me that from my net worth where I am today, how do I really reach that bracket where she comes, will come to me instead of me going to industry company, you know, all that apart, all that apart." Okay, what do you think is a good way for 30s, let's say. Someone who's got 20, 30 years in India, how should he be looking at generating his wealth long term? Okay, on the one side, he's got his job, his business or whatever it is, on the other side, he's got his investment wealth as a product of both. Yes, you have this multiplier where that, how does this work? Like, because today, from where I'm sitting, you know, when I see a lot of people struggling or trying to figure out what's happening, whatever it is, it just looks a little bit difficult, it's different when the market is giving you 15-20% per year, then you feel keep us, my job is great, I can do this, things are different now. Someone, you know, who's saying, "Okay, let's get down to business," 20-25 years, she can't. How do I really multiply my wealth? No, see, again, it all starts with choosing a good wealth manager because you are going to be busy with your operating job, and it's not going to be, it's going to be relentless, right? You're going to be busy, you're going to be creating either your own dream or someone else's dream, you'll be helping them create. So, this guy is the answer to me, and according to me, I've started telling people, and we do a lot of next-gen program for our investors, and unlike many next-gen programs, it started at 18-20-20, and we've started actually pushing the bar, and we say, "Pandra's also a lot of people." But for me, managing wealth is becoming a life skill now, how, for many people, whether it's swimming, or whether it's driving, or whether it's cooking, for many of us, these are life skills. I think just managing your own money because the absolute amount of money growth in India, and we all are aware that over the next seven, eight years, there's a good possibility that our per capita GDP might double or close to double. If all that were to be true, then I think managing wealth is going to be as important a life skill. Now, if you do any life skill, driving, you're going to be a driving instructor, or you're a parent. Swimming, you're going to be a swimmer, you're going to be a parent. This is so different. Similarly, go with an expert for which I gave the answer, comfort, and competence, whether it's a tech, tech plus human, or human, and now with the advent of so many new players, you've got many more choices. I've solved the first step, let's say. After that, please be as open to your wealth manager as you can. There's no different than a doctor. If you, if you just give me one blank answer, that I don't have enough money, I don't have enough money. I go back just thinking that maybe you don't have anything to concentrate on. And I've just put it in a lock-in fund. But you missed out on telling me a few things like your coming liability. So, there could be huge gaps because you'll say, okay, I've changed something, I've got three years of money. Because I don't want you to give it to me. I've locked it. So, be as open. So, what will happen now? So, you have to be as open and comfort for that. So, that's why you have three or four or five investors. You can do that. Karia, I have a few days ago, someone that I respect a lot and very well-known industry leader. He told me, "Can you promise me that whenever I meet you, I won't be able to judge you." Guys, you know, you've told us because we really look for someone, we don't make any It's such an open conversation. I think what he meant to say is look, I may have video-synchritic thoughts, but if you don't know it, you won't help me plan it. So in my case, if some of a wealth manager will come to me, I'll exactly tell him this. That after three years, if my daughter goes overseas, then I can get an extra amount in the dollar. Our lifestyle is maintained. We don't like Indian equity. Temperament wise, we are okay. Now construct something bases me. Now this is a very sharp input that you've given. And I'll give you my net worth portfolio. I also believe that if there are one or two things that you're clear about, you don't have time pressure. You don't have any liability. And you generally don't worry about volatility. And only you know this answer. We say, but if these three are true, you can actually create wealth with reasonable ease over periods of time. Because what happens is we say all this we enter in July, and I'll give you an exaggerated example. Nothing to do with India, but South Korea was down 23 percent. And despite the fact that 31st July, South Korea was up 17.9, despite that such a big rally, it was still down 23 percent. Now you've told me that I don't risk my life, but you've seen this percentage in Europe, and you sell. You've crystallized your loss. You'll never be able to recoup those losses enough in a jiffy. So I think as you rightly said, choose a good manager. Please minimize information arbitrage from your side. Give as much information as you want. And let the fund manager, let the wealth manager come and give you a plan which is suitable for you. If it's an app, you can easily do that. As I explained in Ionic app, you can easily do that. Three, please have regular check-ins. If you're very busy, we say that the tool kit is, it should not be less than one month. It should not be more than three months. Less than one month, you will just keep looking at stuff when you shouldn't. More than three months, you're already too late. So either one month or three month, the frequency may have some check-ins, sit and do. And four, and last, once your basic housekeeping is done in terms of your portfolio creation, also figure out ways around having a good health insurance, whether your term insurance from your offices enough or not. So unfortunately, insurance in India is not an easy conversation anymore because of all that happens around insurance, highly loaded commissions. So it already starts with negative. But in a good quality household now, you need to think of a good term insurance. And that completes the entire journey. After a couple of years, I've seen a lot of families in small areas that if this three or four step process is done, by large, 80 to 90 percent, you are always within the range of what you want to achieve. So you've not given me an answer of how to grow my 1.25 crore. Which is fine. I tried the most politically correct way of asking you that question. That's okay. If 25 years or not, please say something to me. Folks, I hope that you figured out that answer on your own. I don't think any guess on Pasa Vasa. She can't do it, you know, still will ever give you that answer because we are not that kind of a show in any case. She got, let's approach this one more differently. What are the most common mistakes you see? Right. When someone comes to you with a portfolio and you've got like tons and tons of people across those three tiers. In your experience of 20 plus years, what are the most common mistakes you see that investors have made? And here, let's just talk about the investment side. Let's not go into, you know, insurance may not, blah, blah, blah. But just the investment part of the portfolio when they come to you. What's the most common mistakes that you see? So one caveat is I think over years I've seen investors mature a lot, but still one or the two or the more common mistakes I see is extreme behaviors. Sometimes herd mentality, formal and sometimes complete denial. You know, market like these were super cycles are true. AI best example, right? Either everybody wants to get into AI because everybody is into AI or you want to miss AI because you want to be slightly hot. But truth will always be somewhere in the middle. It is not a cycle you can totally ignore and it's not a cycle you can jump in. So if you can just train yourself to be a little more balanced and look, this is not a magic word, but common sense still rules in the world. So any extreme behaviors is where we see some of an issue, apart from that I think things are very large. You know, what the herd mentality is very interesting, right? Because now, nowadays there's so much of social media, so much of information coming in. You just move in herds, okay? Six months ago, it last year, September, October, it was, yeah, it was a multi-asset medal. Why? Because it is not performing. Six months now, one year, the small wet caps are on fire. Your friend comes to you, says, yeah, look, there are small wet caps, but hopefully it will be 80F, not even active. It's given me 12, 15, 20% of what is your multi-asset content? What do I do with that? Nothing, okay? Six, eight months ago, the same thing. International messenger, leave India, you know, AI, 95%, 5% blah, blah. The Korea is down 40%. Something else is happening in some other part of the world. Maybe you didn't have exposure to Korea, you had something else. So psychologically, how does one navigate this, okay? It's a question which is for the ages. Long term versus short term. What's the right way for our investors to just be, you know, just be patient. You have to write on the cycles versus that thing of, you know, now you've gained me tech. Now on a daily basis, I can see AI. It's not like 20 years ago when mutual funds would declare 30 years ago, NMEs would come to you at the end of the day on the next day, if you stay for them, then, you know, you don't have an Excel file and all that. Now every day, psychologically, what's the battle we are fighting and is anyone even winning? Her mentality is not going to live. It's a reality because you're not going in because you believe in it. You're going in because there's comfort in being in a crowd. But I've been thinking about this for a while now. I see no reason why how you manage your wealth. Should be too distant from how you manage your health. You're not taking a GLP one short because you're unable to get rid of it. You're not taking a, you're not popping stat in every night because everybody is taking power. So, you know that you do what is right for your body. So, I really don't know why it is so difficult that you do what is truly right for you. And actually, I'm seeing that once investors come through the curve, initial, Shurukhi, Athra, FNOH, Athra, Yewa, but by and large as the money start increasing, conversations start becoming very different. So, actually, I feel investors are playing their role. It is now the ball is in our court as intermediaries, be distribution, be advice. Of how to make sure that the business of wealth management is actually one of the most patient that businesses. And how do we bring that part of patients to each investor and say, "Look, there is nothing wrong with doing a hurt trade, as long as it's okay for you." One of the more common mistakes since you are in a specific basis, I'll give you a behavioral answer of extremes, is I see in many portfolios there are lock-in products. They didn't understand, they went into a lock-in product, there was a lock-in product, there was a lock-in product. There was no mistake, but that product is very interesting. And there is no mistake. But when you are doing cognitively, you are not really thinking that how long it takes, how long it takes, how long it takes. Now, it has been three or four years, your lifestyle changes. Unfortunately, something has happened. You lose your job or you require money. You found your dream house and you need money for that. You realise, you can't touch the money. So, you start making some of these realisations as you go. And I see many people are, now sometimes I joke and say, "Sir, every person will do their own mistake." I say, "If you can't avoid this mistake, because we've seen this happen all the time." The second thing about liquidity also is, you are giving up the power of getting your money when you want. So, you're doing an extra constraint. You should get slightly higher return. So, unless and until your lock-in products give you a slightly higher premium, you shouldn't. This is one interesting story. But does this mean that you don't need to lock-in? No, it's done. You have to do a private job, do a structured job. You won't get a lock-in. But if you went into these lock-in products because every one of your friends were going, then you are in for a root show. But if you didn't go, you're not going to play some super cycle. And so, the whole point comes back to the same thing. If you are invested in your portfolio for reasons which is only and only unique to you, surprise element is extremely low. I just think that the one common thing that binds all investors of all classes, of all ages, and AEMs is nothing but returns. Just give me something that I can show off to my friends and family, lock-in and I won't take it, but I get what you're saying. I mean, there are some arcane products out there which are sold in a certain way and understood in a certain way and whatever. Okay, let's go across your outlook for all assets now. We spoke about multi-assets, but an international asset also. What are you guys telling your clients these days? Let's start with Indian equities, Indian debt, READS, in which international let's just walk across all of them. We have a neutral position in Indian equities. We were slightly more circumspects some time back, but we are coming back. We are seeing green shoots of earnings coming back. We are seeing some degree of foreign flows coming back into India. And the fact that there has been a big time correction in Indian markets means that the timing is right. It's also not a market you can ignore. It's not that we're not a stable economy or a stable country. So it's a matter of time. So I think the timing is back. So we're back to neutral position in India. neutral means that if you're a 50-equity 50-dead, then you should be at 50. Underweight usually means that you're below 50 or it means that. So we are at different positions. We are back to mean, which is back to being at your core level. that on the other hand, whether it's India or overseas, India and death may have a problem because of taxation. Most of the instruments in Indian tax are at full tax rate. So you have to see post-tax return whether it's still meaningful to your not. But for many people, whether it's fixed or post-tax mutual funds is still meaningful, as long as you know, post-tax are quite normal. But if that return directly correlates with a piece of mind, it's fine. I don't preach that. You should know that sometimes post-tax return may be lower than inflation. But you will say, what would you give us a safety key letter here? So in that, we don't have too much view. In fact, if anything else, we believe that debt overall, globally, right now, there is an inflationary headwind. So unless and until all the situation across the world comes back to normal, the inflationary headwind is here to stay. So global is interesting for us. Now, what happens is that India has also made strides. You've got $250,000 limit for Indian investors and for some large investors through gift city. You have OPI route and ODI route, et cetera. So that is the root part that India has made available for Indian investors to invest. But apart from that, what we realize is, we've all been fed into the fact that asset allocation, diversification is the right thing to do. And we understand the difference between keeping money in equity, debt, rate, commodity, real estate, so on and so forth. But because of the nature of our convertibility, et cetera, we've never done geographical diversification and currency diversification. If you mostly meet investors in different countries, there will always be home country bias. And I'll come to that in a minute from India point of view. But the way we understand multi asset diversification, it extends to geography and rupee also. It's very healthy to say that look. The way I put in various assets, I just want to make sure that I'm a slightly more global investor. But having said that, it is not as simple as saying that, if you're an Indian investor sitting in India, earning in India, spending in India, loan in India, business in India, you will always have majority of your investments in India. Now for us, that is 70%. We have a 70, 30 buys towards India and international, only on the equity portion. And the reason for that is, in India, you always know people or you know people who know people. So for you to find out about a particular company, particular fund, particular manager, particular wealth manager, your ability to do diligence is extremely high. You're making an investment into a company, phone care, Patakya, Saptaekya. And the fact that you are ultimately in the vagaries of Indian ecosystem, means that it's a prudent thing for you to have inordinate weightage to your home country. Home bias, that is home bias. OK. But at the same time, whether it's the current geopolitical trend, the current different super cycles, whether it's a supply side AI super cycle, whether it's innovation happening in some other countries, also means that you have an opportunity to participate in diversified trends. And now if you have the route available through LRS, through mutual fund feeder, which opens and shuts, depending on the dimensions, through gift city-based structures, then why not? You could do that. So we have a position that for equity assets, we try to have a 70/30 approach. This can go up to 80/20. But we have never bleached 70. But depending on our views on different markets, we split between the data. Enter IBM's brand new podcast, Cine5. Rom Combs, directorial debuts, career defining moments, whatever they're vibing with, they're breaking it down. Come join us on Cine5. Life may be something. The first thing is very important. The first memory, first love, first heartbreak, first work. Friends, I'm Gopal Dut. And this is my first podcast. The first one is Gopal Dut. Which will be released on IBM Pub. I'll talk to those people with their own work. Their names we all know. So come to the YouTube's IBM Pub channel or wherever you listen to the podcast. Listen to our podcast. Meet interesting people. The first love, Gopal Dut. 70 Indian, 30 abroad. What are the products that you guys do abroad, right? Because you just mentioned about how some products are on or off, depending on the IRS limits and all that. You know, so what are some products there and what are some ideas there? The most preferred option is, of course, Indian mutual funds through the feeder route, which is now becoming increasingly difficult because the limits keep opening. Some time or the other, some things always open. For investors who have the ability to execute through gift city, which is the OPI route, the options are again available. Because what OPI route essentially says is 50% of the network of an Indian residents, either registered partnership from LLP or private limited company, can invest in a gift city licensed, broad-based fund. So who have access to that can invest into that. And through the $250,000, we, for example, on our app, I've already integrated with an October platform, called Vestid. So which people can go and invest through Vestid, Vestid will create baskets for them and they can buy so. In different means, it's not the most friction-free way to do it. But for people, at least now there are ways DIY platforms like Vestid, you can create your baskets and put it on Vestid, gift city, and Indian mutual fund route. Yeah, Vestid, we know them. We don't show a couple of times. My only thing about internationalists, you need to understand what you're doing. Someone who's a simpler, you know, just put, if you can do that, then of course, it's a great way of diversifying. But on that, Anubhav, I'll take about half a second, maybe. So that is the most important point. We also realize that look, you are talking of international so simplistically in one word, but internationalists, so many two-by-two may trick the different geographies. So one of the things that we did, I think slightly differently, is that we are one of the few wealth managers firms. I can't use the word only because I don't know about all where we have an IP sitting in-house. So we have a six to seven member team who are all experienced in international markets. So it's usually not common for Indian wealth management firms to build international research expertise within the firm. So they will usually do types with different firms, feed into different firms, referral with foreign banks. We realize if I do that, I'm giving my IP away to someone. So we took the tough call. We recruited some high quality people from creating universities, IVLs, people who spent time in high streets in various countries. They were also looking to come back to India because of their belief in India. So they have come. So in some extent, we've taken that and we've taken access to some of the highest quality research available globally. - Okay, cool. When should one switch from mutual funds to a well platform? - No, if you are highly engaged and you are happy doing what you're doing, then DIY is not wrong. I think there is an easier way to split and say that if you're a smaller investor, DIY is for you. I think to an extent, it's right, because maybe wealth management is not available. But we see so many large investors who have either sold their company or retired who are very happy managing their own money. So you need to know what you're doing. But if you need any kind of help ammo or any kind of handling, that's the right time to switch. It doesn't really mean that you have to have a threshold of five crore or 25 crore. But to ask for help at any point in time when it's leading to money, is the right time. - Okay, now the right time has come. Helping choose. What are the two, three things that you would say that this is what you should look for, and this is what you should avoid? Or whichever way you look at it. Like you're someone setting out then saying, okay, the time has come. I'm ready to switch. Helping choose a wealth manager. She can't order two, three things you would tell us. - See again, I will have nothing against fresh management trainees in wealth management firm. But you need to choose someone with a little bit of experience. So ideally, what we do as wealth management practices choose a lot of management trainees, but make them shadow high quality RMS till the time they are ready to go out. So A, whoever you're choosing, you need to have the ability to choose the quality of the wealth manager and the quality of the institution. You also have to choose for yourself, whether the firm that you're choosing is going to be lasting for the next five years or 10 years because a lot of firms sometimes make mistakes and they are not a long firm. So if you're not going to have somebody who's going to be sustainable over the long period of time, it's a problem. And third, whether the firm offers multiple services, multiple products, advice, distribution, a like, which allows you to build it in a certain firm or fashion or not. So I think those two, three checks you need to make. And I would say never meet one. Meet at least three or four people. You'll easily make the choice between those three or four people. And then the same time, what are the red flags I should avoid? Like I call someone or meet three somewhere. And the minute he or she says this, I'm like, oh, okay. So we are an impressive lot. So you don't just meet one person. So meet multiple sets of people. Whether it's the MC guys, whether it's the wealth guys, people carry themselves extremely well. And let's do that credit. So meet three, four, five people. Again, same example, sorry, but I'll repeat. But if you have to get a serious surgery for a loved one, You know, going to go to any doctor, you'll be able to identify him. Ask for references, check about that person. See whether the person has been jumpy or not. See whether he's. He or she's been there for a long period of time. So, I think avoid making the mistake of jumping just on the basis of. a single meeting. And try not to do too much of a single product approach. I think those are one or two things that can work for you. What are single product approach? What do you mean? So, there are usually I see that. who gave you an example that somebody has. Do you sell a single product in the next three years? So, many relationships I see, which are usually on one product. Because, the focus product of the month, they usually don't end up. I mean, it's a toss of a coin. The product does very well. It's very good. But, if you think you can have a relationship with that firm and the wealth manager, for slightly more portfolio-ish kind of an approach, you choose. Otherwise, first choose the wealth manager and then let him choose for you, which product is right through anyone else. Let's get to the money question. The last few questions left in the episode, this one is a big one. One thing is a good rate of return that people should assume here on going forward for their portfolios. Okay, all discussions, everything has happened. Three years ago, people would say, like, 15% is a number. You could apply whatever theory you want. I'm sure you've studied enough to. C, A, P, A, cost of equity, dividend, blah, blah, blah, whatever. The end of the episode is the same. Today, my portfolio is. When I look at it, I'm like, "Yeah, real estate was so much better." You know, "How's that? I could do it now here. I'm in this." Realistically, really longer term. What do you think is a good number for everyone to put into their financial calculators, a coppers for their portfolio? Blended, 70, 30, equity dates are made, okay? Yeah, so two-way answer, one, as far as equity is concerned, I would say, nifty plus minus two-on-basis point, nifty itself according to me, should be modeled in at 11 to 12 kind of a C-A-G-R on a three to five-year basis. One, two years volatility will rise, but in general, 6-7% GDP and another, 3-4% inflation plus corporate earnings. So, that matter, however, our cake, it is, still holds good. I didn't hold for the last two years. That's what I'm saying, but anyway. But if you're going to see the rolling, it's going to be very hard, it's going to be very hard. So, it's in the vicinity. So, it's in general sort of catches up. I'm using two years, two years, two years is a reasonably long one. But you're not wrong at all. You're absolutely right, and these periods test you out. But the great thing to do is that look at it and you're rolling it, and you're rolling things look slightly better. So, I think if you're going through non-ETF, going through a wealth manager, paying a fee, or doing it yourself, nifty plus minus-100 basis point at a portfolio level is a good thing to have done. That is at a portfolio level. Then you break it down. If you're doing simple large-cap mutual funds, then there's nifty plus minus-100 basis point as a book, I think. But if you're pushing the envelope, taking higher risk, moving into mid-cap, concentrated thematics, locked-in products, your risk premium should be higher. So, unless and until you have a belief that this could be 400 basis point, then a risk. not risk-free. But then a nifty return, it's not worth taking that extra risk. That's an important point. So, that is the second part. Third part, if you're moving into commodities, if you're moving into real estate, REITs, if you're moving into fixed income. First question is, why are you moving it for return? Are you moving in for risk? If you're moving for risk, then the parameter changes, then you cannot compare it to nifty. You will start comparing, okay? Ismay, then the easier comparable is a liquid fund return, an SBI deposit, a crystal bond index, and again, plus minus 50 basis point of that. If you're moving for return, then you have to be very clear that you're moving into gold or a silver or a REIT for it to give you higher than the nifty plus plus kind of a return. So, I think those are the kind of things. So, I generally feel, if one is very sanguine about these things that, at a portfolio level, nifty plus minus 200 basis point on a consistent basis, mostly plus less minus. Otherwise, there's a problem, but yeah, it's a fair practice to say, because this way, two years comes in between. So, nifty plus minus 1 basis point is a good barometer to have. But, as you push the bar to riskier products, don't settle for a risk premium, which is not palatable. So, whether or not you get it is a secondary thing, but you should have a reasonable confidence that this product may have been invested in, whose product may both the manager and the strategy will have the ability to at least try to give a slightly higher risk premium than being in a simple good quality fund or ETF. Give me an example, but I didn't, because I tend to have that conversation with some people who come to me with some really arcane product and structure and they're saying, "12% return." You know, you're going into something you don't understand. The guys coming to you selling it could be an NCD locked in with some real estate or some nice fancy rapper structure or something. Why 12%? No, so, again, the question I'm asking is, how should one calibrate this risk return thing when you speak only about illiquid and shady stuff, right? Now, when you're going into an ETF or a passive of a nifty, that's okay. It's liquid. You can buy yourself whenever you want. Your strategy is working, not for getting it spent. Someone's sitting here, you know, someone, some, some smooth guy comes and says, "Yes, yes, I have to try something." What's the good way to calibrate that thing here? No, so I think back again to what the point at least that I think is pertinent from our point of view is, are you doing this product because you want to add extra risk? I'm sorry, you want to drop some risk in your portfolio? Or are you doing this product to add extra data? A simple question will answer it. What have I been doing to show off? I'm having a party on the vegan edge. Congratulations. Sorry, go back, go back, go back. Usually in my experience that what usually happens. Friendship for drinks, you know, they're like, "Oh, wow, I didn't know that. You know, you can get this and also." So, as I said, to those friends, we have to ask the same question because there are friends we need to wish well for them also. Today, I'm going to eat a whole lot of food. So, if you don't do that, then don't do what I'm doing for my financial wealth. So, I think that common-sensical approach needs to be there. Having said that, you know, this 12% example that he gives is very interesting, one from one point of view. If I did this product, I thought, "I'm going to give you a good example." And I've given it to Nifty as well. And here, I can see Nifty when I can go out, see, I've been here for 5 years, you'll be unhappy. But, at the same time, if this 12% is a very straight line, 12% of your business, credit, Nifty has done nothing for two years, you're looking at your Nifty for two years. In two years, there are zero returners and there are 12% of your business. Perspective changes. So, if you did that to add stability on your portfolio, you understand that product where you did that from a risk medication point of view, nothing wrong. So, sometimes the product itself is, "Oh, in fact, you know, over a period of time I started realizing this." It's not that we want made a mistake, we also come through a journey. Products in isolation are never good or bad. It is whether they're suitable or not. Every product, during this conversation, I can see that you have views on certain products, something which is ill-equate. You're almost pushing the bar and calling them shady. It's right, because that's your experience. I love our goodery, personal bias, personal bias. Exactly, right? I am a person, equity alone, but at the same time. So many investors, we made. They don't like the gyrations of equity on a regular basis. They are okay to trade liquidity for stability. So, I think ideally, if you can hand hold someone between the variable, variability of ill-equity, variability of risk, variability of return, variability of stability, and triangulate that portfolio is not from. So, that 12% example is both so, someone like you, I will not eat food. But, somebody holds very upset with nifty, not giving any return. If you're not coming, then I'm going to the market. So, if they place it in a suitable place, it will do its job. You're absolutely right, bro. I am playing on my personal biases, folks who do disclaimer, she can't call that really well. It's just that I feel that, you know, with the new products that are coming in, and people who are wealthy, going in for these products, just because they look cool or they feel that an AI will come in, sir, I am investing in startups. This is my structure. Only thing is you have to wait, blah, blah, blah. Six months later, they just start getting, they just start to get a little bit itchy. What's happening, etc. So, as long as they understand, great. Downside kept market-linked benches. Okay. I'm sure that's the market for it. Let's not be judgmental. Come on, you would have met a lot of people who would have said, "As a nifty jhaja, you will get your return." No problem. He'll buy options, he'll load it up, he'll do this, he'll do that. But as she can't say, as long as that stuff, you understand what you're doing, you know why you're doing it, you've got a return, you've got it in place. Yes, that burden of making sure, as I've been an example here, it's one of the most complicated products. So, it has the most simple product, but there will be three months, entry, three months, exit, quarterly calls, etc. You've understood, you've done it, you knew, no problem. But try and avoid whoops moment. I think the problem happens when there are ocean, I don't know. That is the only thing that I'm always advising people against, that every product has good intentions. Some products also get made only for, let's say, commissions, etc. So, that apart, but in general, products are made with the right intent. And a good quality wealth manager is not about saying, it is about, can I place it with you knowing your suitability? I think that is what your answer to choose a good wealth manager also should be. Anything that feeds into your vanity is not, you know, you're portfolio, I love your vanity, I love you. I mean, you know, you're going to meet your friends and you're going to show off what's going to matter. There's, you know, anyway, forget all that. Last piece of it, I won't say the word advice. Your point of view on what our SAP friends should be doing right now, you know, like they believe two years it on zero, small midcaps doing well, outlook generally improving. What do I do with my SAP? Should I continue, should I stop, should I head on what should I do to it right now? Equity, equity only. Sir, I wish I had a scintillating answer, which will give us eyeballs, but please just continue. I have very cliche answer for it. I have no, but it is a reality. Of course, the only one caveat is, it's a good time for you to just quickly reset and see keep a lot of underperforming in front of you, which is a five-year-old girl, you can't reset a single one of them. Category wise, it'll be the worst service I can ever do to even say, because compounding or magic, that comes when you're really into it. And this is the time when all responsible people should be going out and saying that unless, of course, it excludes people who require money. That's a different kind of dialogue. All of us have. But I'm still have angst for me because we have seen enough and more, whether it was the 2008, GFC, 2020, recoveries are also equally usually very fast. So as long as you're in good quality and Michel funds are the most regulated pool vehicles, what reviews do you guys recommend normally, one month, three months, one month, six months? One or three, not later than three, not less than one. But I don't know whether it's a good idea or not. No, the app doesn't give you a propensity to trade or do, but the point is, since any way, which is currently available, it will at least give you a qualitative review at all parts of time. OK, just to repeat that, folks, not less than one, but not count. Sorry, more than three, not less than one, not more than three months, by the way, for you to review. OK, three questions, quick answers. One thing AI will never replace in wealth management. This myth, please. I did more than one line full answer now. I think they will still be in denial. Today, as I say, in wealth management, I think tech can't replace us. I think we will continue to be in that denial till we get the worst of it. So I think I still believe that there are a lot of people who believe that AI can't replace humans, tech can't replace humans. And it's not a very great thing to have. That's why we believe that R&M only or a tech only model, both are too risky. That's why we believe that. But I do see denial as a very big thing right now. And I think-- but in 2013, I'll call it a day. In 2013, I'll call it a day. One piece of advice. For the first time, H&I who has crossed five crores-- oh, it's big amount-- of investibles of us. 3D adhesive is 500 crores. Bring all the ammunition at that point of time and start putting foundations at that level. If you put foundations at the level of five crores, in fact, I was just in the morning, I was telling someone that one of the things that I've seen many portfolios is, when you see a portfolio which is built over five years, you see that that portfolio is nothing but a collection of products come over years. So there is no soul or purpose. It is just a amalgamation of product. Sophisticated investors do the other thing. They do bottom-up policy, and then you create a portfolio. So create your five crores as a 500 crore portfolio, treat it as with as much respect and put the funding blocks, put the foundational blocks, right? Then in there, not even at five crores, much below that. Maybe even at 50 lakhs, one crore start putting the funding pillars for that. Wonderful. And your one-line philosophy on building wealth in India in the year 2026 and 2027. No, don't forget, there's only one boss that you have in wealth, which is the investor. And this is such an easy hack. You just keep that as the prime focus, wealth management looks like the most easy business for you. OK. With that, that is a wrap on this episode of "Pesa Baza" Thanks to my guest, Shika Subramarim, co-founder and CEO, Ionic Weld. Shika, thank you so much for doing this for our audience. Thank you. Thank you. And audience, as always, like, share, subscribe, to get notifications whenever latest episodes drop. Always, always, always, comment. And if you like this episode, do let us know. The platform is called "Avenic Build", download the app. That's right. The website. And as always, folks, thank you so much for listening to "Pesa Baza". And listeners, if you like this podcast, you can subscribe to our YouTube channel where you get to watch the full video episodes. You can check out other interesting podcasts on the IBM Network. You can also follow us on our social media. We are IBM Podcasts on Twitter and Instagram. If you want to reach out to me, I'm your host, Anubham Gupta, B50 on Twitter. And thank you, really, for thank you so much for listening to "Pesa Baza". (air whooshing) Life may be something. First thing is very important. First memory, first love, first heartbreak, first work. Friends, I'm Gopal Dutt. First first, Gopal Dutt, which will be released on IBM Pop. 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