<div><em><strong>Manish Shah</strong>, Co-founder & CEO, BigDecisions, in an interview with Businessworld's <strong>Sunil Dhawan</strong>, talks about why their goal is to be the ideal starting point of people’s big financial decisions </em></div><div> </div><div><div><div><strong>Is BigDecisions a robo-advisory firm? </strong></div><div>When we started out, we had no idea that we will be going into a space that will be called robo-advising. It’s more of a blanket term and conjures up images that seem to suggest that suddenly people are going to be eliminated and machines taking over. It’s nothing near that. There are various models across the globe with companies like Wealthfront and Betterment based in the US being some of the better known who work on an algorithm based trading reducing dependence on advisors or fund managers. While business models might differ, essentially it’s about putting the control back into the consumer’s hands. At BigDecisions, we have served close to a million users over the last year and a half. </div><div> </div><div><strong>What form of robo-advisory is BigDecisions? </strong></div><div>It’s a stepped up version. Robo-advisory typically starts with an assumption that you’ve already made your mind up about the amount you want to invest. So, we are stepped-up in the sense that we help users understand things (like how much to invest in order to meet particular goals) better before executing the purchase decision. In our case, when the decision ends in product sale, we have partners, who will facilitate the next step. Imagine a goal like planning for your daughter’s education. We focus on helping the user first arrive at (using data and mathematics) how much he / she should be saving every month to reach that goal based on certain assumptions. Let’s say it comes to Rs 40,000 a month. </div><div> </div><div>The next step is to figure out which investment instruments this amount should go into. We believe that the first part (of estimating more accurately) is not always done correctly. We have chosen the more elementary, the more basic areas because if you don’t know where to start, the ease and the niceness of the transaction is not what you are looking at. For example, what’s the point of using a very convenient platform where you end up saving Rs 10,000 every month when you should be setting aside Rs. 40,000 instead? Our goal is to be the ideal starting point of people’s big financial decisions to help people better understand the basics before they move forward. </div><div> </div><div><strong>How is the present state of advice that Indian investors get? </strong></div><div>You have a huge number of middle level income people in India who haven’t necessarily been served adequately either in the form of advice or by aggregator platforms that help consumers compare and buy products. Let me just flip it and address the reason we really exist, when there were always people to help with financial decisions. I think there is a clear shortfall in the quality of advice people get especially if you are not a high net worth individual. So, If you draw a 2x2 matrix and look at advisor knowledge, with low-high on one axis and advisor integrity on the other, you will have advisors who tick on the top right, i.e. have integrity and knowledge with investor interest. However, in our experience, 90 per cent of the country (advisor community) falls in the other boxes. Sometimes, lack of advisor knowledge is an issue. More often that not, incentives are misaligned i.e. not always in the consumers’ best interest. All this combined has necessitated consumers wanting to be more in control of their financial decisions. </div><div> </div><div><strong>Where does BigDecisions fit in? </strong></div><div>So, the whole idea of BigDecisions is to help Indian consumers that neither know enough to make their own decisions nor trust entirely the advice that they are getting, by making available data that they don’t normally have, combined with algorithms and research backed content, helping them to be more in control of their financial decisions.</div><div> </div><div><strong>Are Indian investors Internet savvy and financially inclined enough to use online advisory platforms? </strong></div><div>This is improving constantly. There is a whole eco-system built around saying, “figure your own stuff now’. We defined our consumer as someone who is not financially savvy but is tech savvy enough, to know that there are ways to get online and do one’s own research. Two years back, 70 per cent of all financial decisions were taken by seeking help in some form or the other online. Regardless of what you are doing offline, there is a certain influence it is having in doing the much needed ground work in terms of research. People whom we thought would find us useful for their needs were those who’d be, tech savvy enough to be net banking customers. When we started nearly 2 years ago, there were about 27-28 million internet banking customers, Today it’s well over 50 million. There are 600 million bank account holders, so we still have a long way to go. And while we’re too small to bring about a big change by ourselves, I think it’s clearly happening on its own and we are only facilitating that. Our objective is to make users feel more in control of their financial decision making process rather than just easing the purchase process. </div><div> </div><div><strong>Is BigDecisions helping consumers in asking the right question? </strong></div><div>We have several tools and calculators on the site that help users with some of life’s big financial situations. Our Rent or Buy a house calculator is one of them. After using such tools we help people ask the right questions and start a conversation with the broker, advisor or the agent. So, rather than ask general, more open ended questions whether or not he / she should buy the property, our tool helps consumers seek answers to more specific questions like reasons for expected double digit appreciation that could be a bigger driver of the buying decision rather than a general recommendation. </div><div> </div><div><strong>What has changed since Newscorp taking stake in BigDecisions? </strong></div><div>Post the NewsCorp stake, the focus is to add several elements that customers need to take for better financial decisions. This is achieved through strengthening our content be it in the form of topical blog entries and engaging video content pertinent to decisions related to retirement planning, education, insurance and housing. Very often there are several more elements to the decision than just the money. The strength of effective content backed by News Corp’s digital expertise is what gives us the edge in a market like India.</div><div> </div><div>Let’s take the example of your child’s higher education, for instance. A better starting point is to get a sense of how much you’d need to set aside depending upon the choice of discipline and geography your child might choose and you should be able to create several ‘what ifs’ such as how much you’d need to save for an MBA programme in the US or an engineering degree in India. Once you’ve got a sense of building the requisite corpus however, there are several other aspects to this decision. For instance, you’d like to better understand payoffs in terms of job prospects after particular course to judge if it’s worth the spend. It would also be worthwhile to get a better sense of what other parents like you are considering and possibly to even connect with such people. At BigDecisions, we’d like to help people with the entirety to the decision and that’s where a lot of work will go into and having News Corp’s support is a big plus.</div><div> </div><div>People have focused too much on the product and transaction sides of the decision. In the education example above, the bigger and often tougher decisions are about knowing how much of a corpus is likely to be required and where to start. Which products to buy and from whom in order to build that corpus come next and if the math is done right upfront, these become relatively easier decisions.</div><div> </div></div></div>
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