If you are a Preferred, Priority or Premier customer at a bank, you get a Relationship Manager, else you get the Call Center. Similarly depending on your investible surplus now either you can avail a Robo Advisor or an actual human Investment Advisor.

But apparently people are quite happy with the Robo Advisor as seen from the success of financial technology companies like Scripbox in India. In a recent news article dated 10 Sep 2019, Scripbox said that they will break even in 12-18 months. Scripbox has a subset of curated MFs that they recommend to their customers. People seem to be happy that –

[1] They don’t have to leave their homes to start a systematic investment plan. When groceries, books, clothes, salon services, restaurant meals, blood tests and so on arrive home; who wants the hassle of taking a day off to visit a financial services centre and fill in the application and submit KYC docs and wait for another few days to kick start the investment. Can be done by the click of a few buttons from the comfort of a sofa.

[2] They are not overwhelmed by choices. You fill in your criteria and the Robo Advisor presents a list of narrowed down choices and you pick one. Otherwise, you have to do your painstaking research.

[3] The Robo Advisor does not mind if you start an SIP of Rs. 1000/- or Rs. 10,000/-.

And now you have the traditional brokerages also revamping their digital offerings to include a Robo Advisor to lure in the do-it-yourself millennials. These new tech firms entering in the financial arena are giving the incumbents a run for their money.

Established in 2012 as per the website, Scrip box has 5 broad investment goals you can select and within each goal, they have selected the MFs for you to invest.

I looked at their website and choose an option to start an SIP of 1000/-. The site advised that I increase by SIP every year by 15% to reach my target goal. So as per my calculation, a 15% increase on Rs 1000/- next year will be Rs 1150/-, but the SIP amount on the site for future year was shown Rs. 1200/-. Skeptical, I asked the customer care why the additional Rs. 50/-. They said since the SIP amount has to be in multiples of 100s, so Rs. 1150/- is rounded to Rs.1200/-. It is absolutely true that the SIP amount has to be in multiples of 100s 😇; but then it’s an annual increase of 20% in SIP amount to reach the target. However the increase is optional.

It is good to be educated on the fact that increasing the SIP investments annually is a booster dose for the savings; just like increasing the EMI annually helps in paying off the loan faster. It’s a good recommendation from Scripbox.

Paperless is the key word and this the would be beneficial for a digital native who is starting  out with the MF journey. Scripbox claims to charge no fees from the customers; but there is nothing stopping them from recommending those MF schemes that offer them the highest commissions from the MF houses. But even if they do, it is more important that the funds they recommend perform and deliver the promised pot of gold.

So have I invested with Scripbox? Not yet. Two reasons – first, the funds they offer overlap with the existing MFs I have, which was accomplished in the pen and paper format, requiring quite a few number of visits to the MF office. So am not switching over after all that hard work. Second, I am a stickler for the Direct investment option, bypassing agents. Hence I will not able to comment on the operational aspects of investing with Scripbox. But I have successfully ventured the paperless route with another fintech company, that will be another story.

Another point here is if you can save at a click of a button, you can redeem as easily too, which means the only way your investment can compound is if you are disciplined and manage to stay above your emotions esp. in a bear market.

This is not  recommendation to invest with Scripbox. Please do your due diligence. There are many other fintech companies in the running – FundsIndia, Groww, Fisdom, PaytmMoney, ETMoney. Starting with curated MFs, these firms and their customers can hope to expand the platform to include portfolio management services, AIFs, stocks and much more. But AI or Robo Advisors also mean slow death for the Investment Advisors, they will have to re-skill and move up the value chain to survive.

But it will take sometime for the digital immigrants to trust the process as people are still suspicious of the security aspects of the financial info and longevity of these tech firms.

Lastly, why take Scripbox as an example? My reasons – I liked the name; I loved their website design – simple and elegant – it made me want to explore more; they have displayed their contact no. prominently, which is a boon when you want to speak to customer care; their customer care service via chat was good – all superficial factors; yes – very true. For their recommended MF investments to bear fruit it, the wait will be a few years, so for the initial sale, the look and feel factors matter.

Till next post, take care !!