MDAG to enter BFSI
I saw this news item that “Reliance to enter BFSI” and thought of what all could be done by RIL when they enter the BFSI space
- They could acquire controlling stake in Hdfc group – gives them a helicopter entry into the financial services space and with a solid brand name. Is it difficult? I do not know what is difficult for MDA, but this is possible. Of course he coule get Icici also – or something else.
- Knowing MDA’s love for building instead of acquiring, he could set up these businesses on his own.
If he were to set up an Nbfc, an amc, a brokerage firm, and a Re-insurance firm, he would be in all the areas of financial services. Once you have size, margins do not matter – the numbers will make it happen.
What if he were to give you a Rs. 10,000 per month offer?
You get internet, brokerage services, asset management services (a range of 20 etf or Fof), demat. No percentages, no nothing. Just about 3 million customers.
What happens to fund managers?
Well they could all be given free or advertised space on JIO. So I go and advertise my investment skills. I then offer advice on portfolio management – and the client pays me a fee. Jio constantly shows my aum and returns on an aggregate basis. So a fund manager named XYZ has say Rs 10,000 cr aum and has a trailing growth of 12% when the sensex has returned 9%. People come to me.
JIO does the basic due diligence, and lets ME access clients portfolio (my clients) on a piecemeal basis – but I can’t access his portfolio without paying him a fee! So fund managers get a platform to showcase their portfolios.
Research companies can come and show case their research. Financial planners can come and build “portfolios” – depending on risk profile, age, sum of money, etc.
So as an investor I come to JIO platform read about Goal based Investing (on Subramoney.com of course!!), go to a risk profiling agency. Once that is done Jio will suggest some fund managers ranked on some basis. I may then buy a Large and Midcap fund by Anand Radhakrishnan, a Contrarian fund by Naren, and a debt portfolio by Hdfc mutual fund. I may go to Hdfc bank and set up a sip. It might cost me in ABSOLUTE fees of say Rs. 25000 per annum IMMATERIAL of the amount of money invested. For these 3 fund advisers they get a huge amount – even though the amount per person is very small.
Wow that’s exciting !!