In its response to the Securities and Exchange Board of India’s consultation paper on amendments/clarifications to the Investment Advisers regulations (SEBI), Bharosa Club, a Registered Investment Adviser (RIA) firm, has sent its response to SEBI’s Consultation paper which broadly supports the suggested reforms. As an RIA, Bharosa represents the interest of investors & has suggested a few changes that will make the benefit of mutual fund investing reach millions of new investors in a short time span.
Bharosa Club was started a few months ago by Sanjay Bhargava, ex-Paypal founding team member, with a vision to serve millions and offer an innovative, fresh and honest approach to investment advisery. In a short span of time, Bharosa Club has garnered assets worth 120 crores, and has caught the eye of investors looking for a commission-free, open and transparent environment.
In its letter to the regulator, Bharosa Club has stated that if all stakeholders of the mutual fund industry work together, no one has to lose and everyone can together make India prosperous by making every Indian prosperous. It goes on to add that financial inclusion is not just a social objective, it can also make great business sense. 25 crore Indian households need advice and will be able to pay for it. In five to seven years, if households on the average pay Rs. 5000 for advice per year then the advice market itself will be Rs. 1,25,000 crores every year.
In order to achieve the above, Bharosa believes that the industry needs to innovate and do things differently. Drawing from his personal experience at Paypal, Sanjay Bhargava, Founder and CEO of Bharosa Club says, “There are two critical aspects in the short term that the industry should look at. Firstly, we need to solve the infinity equation. As volumes tend to infinity costs should tend to zero. Paypal, which is now a $50 billion plus company did this. I was on the founding team and have little doubt that if we think together we can solve this equation and benefit millions.”
“Secondly, we urgently need to replace bad selling with good selling. All those who want to get paid by investors and have zero conflict of interest should welcome becoming investment advisers. If everyone is focused on expanding the market and not on protecting old ways, then all those who truly want to serve millions will grow their profits exponentially. Those who do not serve investors in an honest unbiased transparent manner do not deserve to be protected”, he adds.
As part of its responses to SEBI, Bharosa Club has listed down the following action points to achieve the stated objectives of the regulatory board: