Search for:

What is Indemnity Insurance?


Indemnity insurance or professional indemnity insurance is a type of insurance policy which is designed to shield professionals and business owners if they are found to be guilty of some event such as misjudgement or some other professional risks. Indemnity insurance is also called as professional liability insurance. It provides cover for the claim of providing inadequate services, advice, design, etc. against the insured. Liability insurance also covers the compensation that is payable to the client for correcting the mistake.


Need of Professional Indemnity Insurance


While working as a professional, it is always a possibility that you or your colleague could make a mistake, regardless of the experience. So, it is a good option to have a liability insurance if you regularly work with clients or businesses and Handle their work, data, intellectual property or even provide them with professional services or advice. The indemnity insurance covers you and your firm from facing financial losses if a claim is made against you or your company. Thus, having a professional liability insurance which adequately covers your organisation is a safe option while doing a day to day business.


Professional Liability Policy Covers


An indemnity policy covers the following Range of scenarios –


  • • Professional negligence
  • • Loss of data or other documents
  • • Loss of goods and/or money
  • • Unintentional breach of confidentiality or copyright
  • • Claim investigations expenses
  • • Defamation


Who Can be Insured Under the Professional Indemnity Insurance?


This policy can be taken by –


  • • Doctors and medical practitioners like surgeons, pathologists, etc.
  • • Engineers, contractors, architects, etc.
  • • Hospitals, clinics and nursing homes
  • • Lawyers, chartered accountants, counsellors, advocates
  • • financial advisors, management advisors, etc..


Exclusions from the Professional Liability Insurance Cover


There are certain exceptions which are not covered by the indemnity insurance. Let us take a look at those –


  • • Criminal acts, frauds and other law violations.
  • • Being under the influence of drugs or alcohol while rendering the service.
  • • Intentional damage
  • • Contractual liability
  • • Act of war or terrorism
  • • Insolvency of the person with indemnity insurance.


Top Insurance Companies that Provide Liability Insurance


  • • New India Insurance
  • • Reliance General Insurance
  • • United India Insurance Company
  • • ICICI Lombard Insurance Company
  • • Tata AIG Insurance.


Source: Fincash

What is Commercial Crime Insurance Coverage?


A commercial crime insurance is a policy which offers comprehensive cover and provides protection against employees’ theft and any losses from forgery, computer fraud, etc. In the event of any commercial crime, it becomes the duty of the insurance company to safeguard the policyholder against various losses or damages.


Undeniably, you can’t ignore white collar crime which is rising at an alarming rate. Many times, companies don’t think of purchasing the cover against fraud. However, the reality is that it’s more the senior staff and trusted employees that commit fraudulent activities. And when they strike, they do it not for once but again and again over a period of time.


As a company, it becomes necessary for you to have a viable financial coverage instead of wishful thinking, to get protection against such fraudulent activities. Here, commercial crime insurance policy can play an important role.


Here are the coverages which are available with a commercial crime insurance policy=


Employee theft Cover= It includes loss of securities, money or other property by theft or forgery by the employee of the company.


Premise Cover= It includes losses from destruction, wrongful abstraction, theft of securities or money from the policyholder’s premises by third-parties.


Transit Cover= It comprises of losses from disappearance, destruction of money or security outside the policyholder’s premise by a third-party.


Depositors Forgery Coverage: It includes losses or damages which arise due to losses from instruments like cheques which are fraudulently drawn by a third-party on account of the policyholder


Computer Fraud Coverage: It comprises of losses which a policyholder has to endure due to computer fraud made by third-party along with the expenses which the policyholder has to incur due to a violation of computer.


In most of the cases, commercial crime insurance policy comes with a deductible clause which states that at the time of loss, a part of the claim would require being paid by the policyholder. The insurance company would pay the remaining amount. Further, most of the insurance companies allow customizing commercial crime insurance policy to cover various fraud-related losses as per the company’s specific requirements.


The insurance policy also helps by covering the additional costs which a policyholder incurs at the time of loss or damage. For instance, after the commercial crime, the policyholder may require a temporary replacement of equipments or temporary workforce or office space. Similarly, additional expenses may be spent by the company in transporting of documents or equipments. Here, the insurance company may pay the additional cost along with the additional cost incurred in bringing the external workforce on board.




KS Automobile Spare Parts was situated in Pune. Backed with over 100 employees, the company had a huge clientele base both in India and abroad. Last year, the company got a big contract of exporting spare parts worth Rs 2 crore to a buyer situated in Dubai. Considering the quanturn of the order, employees were working in double shifts.


One day, a worker named Kishore was working in night shift. During the break when a few employees were outside the site, he took an undue advantage of the situation and stole ten packets of spare parts which were to be included in the part of the exporting order.


However, Kishore’s crime was captured on CCTV which was installed there. Though the company recovered the packets of spare parts were found; they were in bad condition.


The act of Kishore caused heavy losses to KS Automobile, who had to employ extra employees to manufacture spare parts which got damaged during the theft. It was an additional cost that the company had incurred. The entire incident made the management of K.S Automobile to think what could have been done to avoid the situation.




The situation would have been different if KS Automobile had a commercial crime insurance. The insurer would have come forward to cover the losses which the company had to incur due to theft committed by its employee. Further, as K.S Automobile had to pay extra to get additional workforce, the cost associated with it would have been covered by the insurance company as well.

Source: Secure Now


Asset allocation strategy during market volatility : Expert views for investors


Stock markets are volatile by nature which tends to make investors nervous about their exposure to one asset class, especially equity. To get your asset allocation formula right at all times, it is important for investors to understand their risk appetite and choose the right strategy to build wealth in the long term.


Diversification plays a key role in your financial planning. We asked Chirag Mehta, Senior Fund Manager – Alternative Investments, Quantum AMC if there is a thumb rule for diversification to achieve financial goals in the long term.


“Diversification helps in balancing out the risks and returns to achieve adequate returns at the same time minimizing the risk for increasing the probability to get the return an investor is looking for,” he said during an exclusive session conducted by Economic Times to address investor concerns amidst market volatility.


Chirag Mehta also shared a tried and tested Asset Allocation Rule of 12:20:80 that works across market cycles and that investors should adopt while investing in mutual funds to mitigate risk.


“Asset Allocation Rule of 12:20:80 refers to 12 months of expenses kept aside for emergencies like job loss or loss in business or a medical emergency. The rest of the money needs to be split 80:20 which means 80 percent to be invested in equities and 20 percent in gold assets. Gold acts as a diversifier and adds stability to your portfolio,” adds Mehta.


Maintaining a good balance between asset classes that have appreciated too much and those that have not performed well in the short term is crucial. For investors to set the asset allocation right, it’s important to understand the characteristics of each asset class. “Investors should stick to their objectives while diversifying into different assets like equity, debt, and gold. Since asset allocation is for the long term, short-term volatility should not affect your portfolio,” feels Anup Bansal.


On factors that play a crucial role in rebalancing and monitoring the portfolio, Kaustubh Belapurkar, Director – Fund Research, Morningstar India says, “Rebalancing is within a strategic limit depending on investor’s needs and market conditions. From 80 percent, the equity allocation can come down by a few percentage points but never zero, this has to be remembered.


Gold can be a great diversifier provided investors have it in their portfolio at all times, not just when it’s performing. You have to stick to your thesis and keep rebalancing the portfolio within a confined (bracket) rather than trying to make it zero or one as it’s always about modulating the exposure where you see pockets of overvaluation and undervaluation.”


Source: Economic Times

10 Tips on How to Plan for Early Retirement

Many of us might be planning to quit job or close a business or pursue hobbies (without expecting money) by taking early retirement. However, early retirement is not that easy unless you plan them well. You need to be ready with a few things. Certain things would not be in your control. In this article we would provide some tips on how you can plan for early retirement.


What does early retirement mean?


While retirement age is 58 years, many are going on early retirement of 5 years or 10 years or even 20 years. Means, people want to retire at 40 years or 45 years or 50 years of age itself.


10 Tips on How to Plan for Early Retirement
Here are major pointers which can help you to plan for early retirement. This list is not comprehensive, however, can provide clarity.


1 – Decide what you intend to do


One of my friends Mr. Srinivas indicated he wanted to have an early retirement at 45 years of age. While I appreciated his decision, I asked him what he is gonna do after retirement life. He said “I have not yet planned”.


This is not the biggest mistake one would do when they plan for early retirement. You want to retire early, but you do not know what you are going to do after retirement? One can pursue their hobbies. They can try to achieve whatever they aimed, but could not do in their life. They can try creating Vlogs, freelance service in the areas they are passionate about, wealth management tips, mentor people in the area which they are expertise etc., There are Several Ways where you can earn during your leisure time.


I know many people personally who planned early retirement and worked as consultants in advising corporates on how these corporates can scale-up both in terms of business and also in reducing attrition in the company.


2 – Take Sabbatical / Leave for a few months


Last year, one of my colleague was thinking of resigning as she wanted a break. Just before she put the resignation, we had to casual talk. Taking a break is good, but the approach could be different. Based on my advice, she approached HR and had 6 month sabbatical leave. Those 6 months, she had fun and frustration both. Finally, she agreed that she wanted a small break and not a long break.



One should decide what kind of break they are looking for. Planning for early retirement is good, but, one should experiment by taking couple of months leave or with sabbatical leave of 6 months to 1 year. This is like testing yourself whether you are ready for early retirement or not.


3 – You don’t get regular income after early retirement


Many individuals would estimate how much income they might get by doing adhoc / hobbies / freelancing services etc., However this is not regular income. It such income can fluctuate.


I still remember one of my friends who took early retirement and had insurance blog where he used to earn income through advertisement as well as selling insurance policies online. He used to earn anywhere between 1 lac to 1.5 lacs per month till couple of year back from where he used to manage expenses. However, these days he earns some peanuts. One should not expect to have regular income from such activities.



4 – Expenses would continue to rise

You might be spending a specific amount of expenses now. However post retirement, you do not have control over such expenses. Check the latest inflation rate in the US which has crossed 8%. You should understand that you do not have control on your monthly expenses. An increase of 6% to 9% of yearly expenses should be considered while you estimate your future expenses.


5 – Don’t expect high returns from fixed income

Till 2020, Bank FD’s offered 6% to 7.5% returns. In the last 2 years, fixed income options including bank FDs or debt funds have given 4% to 5% returns. Don’t expect high returns from fixed income options in future. Countries like Denmark, Japan, Sweden and Switzerland have negative interest rates i.e. Investors need to pay money to keep their money in banks in these countries. While it might take some time for such situation to arise in India, one should expect that FD rates would decline gradually in the coming years.



6 – Invest in equity to beat inflation

If you have accumulated some money and investing in non equity options, then be ready that your accumulated money would reduce at a higher pace compared to the inflation rate. The only way to have returns that beat inflation is to invest in equity. However, investment in equity comes with risk. If you are thinking of early retirement, consider taking risks and invest in equity.


7 – Don’t invest in equity and expect to withdraw regularly

This is the biggest blunder mistake investors make. They plan for early retirement, they feel they can still take risks, invest in equity and start withdrawing some money on a regular basis. Investment in equity is a long term game. Don’t play in the short term. You would lose money. Alternatively, you can try for Some of the Good Systematic Withdrawal Plans in Mutual Funds.


7 – Two bucket strategy works very well

We discussed about 2 bucket strategy earlier.


i) Based on whatever accumulated amount, one can divide this into 3 parts. Two parts can be invested in equity for over 7 years. Since equity generates 10% returns, your investment would get doubled in 7 and odd years.


ii) One third of the amount can be withdrawn for over a 7 year period. One can invest this in simple FD or simple short term debt fund.


iii) Repeat step-1 every 7 years. Means the investment amount would always double for the rest of your life.


This 2 bucket strategy works well as you are not touching the equity investment for 7+ years which is required to grow.


8 – Have you considered all your financial goals

Don’t be in a hurry and go for early retirement. Consider all your financial goals as part of your plan. It could be children education, foreign education for children, foreign vacations in the future, buying a dream home etc. All these come with a cost. Don’t go for early retirement and then start thinking about these things.


9 – Don’t underestimate skyrocketing medical expenses

Mr. Rajesh wanted to have an early retirement at the age of 45 years. He is physically fit when he had an early retirement plan. However, after a couple of years, he had serious health problems and his medical insurance did not support them. He had to spend lacs of rupees on medical expenses which he never planned. While it is impossible to estimate the skyrocketing medical expenses, there should be a health insurance plan + some amount allocated towards it.


10 – You need to take your family support too

After you have considered all these pointers, consider taking your family buy-in too. Unless they support you, early retirement is not going to be that easy. Once you explain your plans, how you would manage family expenses and what you intend to do after your early retirement, things can be clear to your family too.


Source: Myinvestmentideas

Smallcase vs Mutual Fund : Which one is better


Mutual funds and Smallcases are the two asset structures in contention, and we’ll compare them over the course of this article to understand the fundamental difference between Smallcase and mutual funds.


As investors, most of us spend a considerable amount of time window-shopping for the right investment avenues. “Should I invest in the safety of debt instruments or should I stay equity-focused? Should I pick evergreen stocks or can I benefit more from trading the seasonal ones? What about adding some cryptocurrencies to my portfolio? How long should I stay invested?” Questions, so many questions.


The truth is that unless you’re an exceptionally nuanced investor with well-rounded insights about multiple sectors, a diversified portfolio can hold the answer to most ‘what and why questions as far as investments are concerned. Two financial avenues facilitate this diversification optimally; the first is a household name and the second has emerged as a buzzword in the last year or two. Mutual funds and Smallcases are the two asset structures in contention, and we’ll compare them over the course of this article to understand the fundamental difference between Smallcase and mutual funds.


What are mutual funds?


A mutual fund is a pool of money collected from many investors to invest in securities like stocks, bonds and other assets. Professional fund managers, vetted and hired by mutual fund houses or Asset Management Companies (AMCs) are responsible for picking the constituents of the fund and allocating capital; they can attempt capital gains or income production based on the investment objectives of the fund as per the prospectus set out at the time of the fund launch (called NFO).


What is a Smallcase?


A Smallcase, on the other hand, represents a capital allocation structure similar to portfolio management services (PMS) that were previously reserved for wealthy individuals (Read: HNIs and UHNIs). As a product, this is an idea that has caught the fancy of many well-heeled millennials as well as on-the-brink wealthy, ever since SEBI hiked the minimum investment amount for portfolio management services (PMS) from ₹25 lakh to ₹50 lakh in November 2019. In some sense, Smallcase may be called affordable PMS – with a starting price as low as Rs199/month. Basically, a Smallcase is a basket of stocks or ETFs, decisively created by the top qualified and registered investment advisors (RIAs) in India, based upon a theme, strategy, or objective.


David vs Goliath: A legacy product vs a promising challenger


If we have to compare the sheer size of the market with respect to Assets Under Management (AUM), mutual funds represent ₹36.74 trillion as of September 30, 2021. In comparison, Smallcases are a disruptive product that has been around for approximately 6 years now. Quoting the founder and CEO Vasanth Kamath “Our users multiplied three times from 9 lakh in March 2020 to 28 lakh in March 2021.” In FY21, the firm saw Rs 8,000 crore invested through its platform. A drop in the ocean, as far as the larger financial products industry is concerned.



Smallcase vs Mutual Funds: Points of Comparison


1. Exercise Control
Investing in Smallcases potentially offers investors better control over securities as the shares are credited directly in the Demat account. Having the portfolio right at your fingertips allows you to time your exit and know where each investment goes, which isn’t possible with mutual funds; you can cherry-pick which mutual fund you want to invest in, but the customization ends there.



2. Risk Mitigation Mechanisms
Smallcases are thematic investments; they invest in companies and securities that follow an underlying strategy or idea. For example, there can be a Smallcase that focuses on Clean Energy companies or fast-growing tech companies that focus on enterprise software integrations. Since these ideas are highly specific, diversification is restricted. For those intent on diversification, mutual funds offer a basket of good companies that are related by larger themes such as industry type and revenue benchmarks that may be a better hedge against volatility over several business cycles.



3. Cost of Leaving
In many mutual funds, there is an in-built penalty for liquidating your assets before the minimum stipulated time (generally just about a year)- this expense is called the exit load which ranges from 1-2% of the total investment. Typically, all mutual fund houses adjust this amount against the net asset value (NAV) of the fund. Smallcases, by design, allow investors to buy individual units of securities that are directly credited in the demat account like common shares. Since there is no exit load on selling shares, there is no exit load on selling smallcases.



4. Management Fee
Any asset allocation structure is only as good as the people managing it, i.e., the fund manager- who in these cases is typically someone who holds high repute in the financial markets. Understandably, this expertise attracts a certain cost, apart from the cost of monitoring and managing the fund. In the case of mutual funds, this cost, called the expense ratio, is a percentage of the total fund value, capped at 2.5% by SEBI. Smallcases have no fixed range – the cost differs from case to case and RIA to RIA, depending on the nature and theme of the basket of investments.



5. Access to Returns
Smallcases give investors direct access to their holdings since the shares are directly credited to their demat account. Hence, all corporate actions such as dividend distribution as well as the issue of bonus shares take place directly with the investors. In the case of mutual funds, the returns are collected in real-time but distributed quarterly.



6. Volatility
Due to the nature of the theme-wide concentration of Smallcases, they are typically more volatile than the stock market in general since the risk is concentrated in a specific strategy or idea. However, as one of the fundamental principles of finance states – the higher the risk, the higher is your potential for gains. Mutual funds, on the other hand, spread the risk across companies working in different areas even if the fund is concentrated in a specific industry. Hence, the latter is more resilient during market ups and downs.


Where should you invest?
While choosing between mutual funds and Smallcases, you must consider the following questions:


• Do you have adequate knowledge of the market?
Investing in a Smallcase requires some degree of market research and ample time to sort through to find the best Smallcase to invest in. It is an excellent investment for those who have a good idea of how markets operate. However, you can invest in a mutual fund without any market knowledge.



• How much control do you want over your investment?
Smallcases allow you greater flexibility, transparency, and control over your portfolio. You can choose a Smallcase that aligns closely to your financial goals and ideas, giving you greater discretion. On the other hand, investing in mutual funds comes with comparatively low transparency, and you have minimal influence over your portfolio.



• For how long do you want to park your funds?
Smallcases come with no lock-in periods, while mutual funds require you to lock-in your money for a considerable amount of time. Moreover, the charges associated with mutual funds are higher.



• How much time are you willing to spend on tracking your investment?
Investing in Smallcases requires you to keep a tab on your investment. You will have to decide when to enter the market and when to exit it to get the most returns. You may also have to keep a check on the returns to make sure they are on track. As for mutual funds, you can simply invest and let the experts take care of your investment. You may review it once a year.



Based on how you answer these questions, you may choose between these two investment avenues.


Closing Thoughts
As far as investments as concerned, asset allocation structures are as effective as the investor’s understanding of their goals. Both Smallcase and mutual funds are excellent avenues for growing wealth and intelligent investors should use these tools judiciously to their benefit. Where mutual funds provide the diversification a portfolio might need, Smallcases are conveniently packaged customizable investments in simple ideas that could return well over time.


Source: Tejimandi

Impact Investing: An underrated investment opportunity for family offices and high-net-worth individuals


Family office and HNIs can be significant investors for social enterprises with their patient and flexible capital. Here’s a lowdown of reasons behind their hesitancy and what impact investing can bring to their portfolios


If Covid-19 has taught us anything, it is that the world can no longer afford to ignore social and environmental issues. Climate change, poverty, human rights, gender inequality are just some of the issues that are fast becoming central to mainstream business decisions. This paradigm shift towards people, planet and profit is a direct result of the growing understanding by global leaders that socio-environmental issues are agnostic in their impact on people’s lives, cutting across socio-economic levels and geographies. One of the solutions to solving these global issues is impact investing.


The impact investing ecosystem in India has rapidly grown over the last decade. According to the data from the Impact Investors Council (IIC), more than 600 impact enterprises in India now affect more than 500 million lives, attracting over $9 billion in capital. However, most impact capital comes from foreign donors and investors, be they development finance institutions, institutional investors, high-net-worth individuals or global foundations. While this inflow of impact-focused capital has helped build a robust ecosystem for impact investing, it continues to serve as a stark reminder that domestic private capital is still focused on conventional approaches to investment.


Indian family offices and high net worth individuals (HNIs) are important stakeholders in India’s investment landscape. However, investor participation in impact investing is still at a very nascent stage. According to ‘Unlocking Impact Capital: The Indian Family Office Edition’, a study brought out by Waterfield and the Indian Impact Investors Council, domestic family offices and HNIs make up only 7.5 percent of participants in impact investments in India between 2016 and 2020. The same study also shows that Indian family offices and HNIs have polarising views on impact investing. Nearly 52 percent of Indian family offices and HNIs believe that doing good can also generate market-linked financial returns and a near equal proportion believe the two must remain separate and distinct. Family Office and HNIs, with their extensive networks, can be significant investors for social enterprises with their patient and flexible capital. Coupled with the intent to align their wealth with their personal values (a trend which is developing amongst the NextGen), it makes family offices and HNIs perfectly placed to become an attractive source of capital for this ecosystem.


For family offices, impact investment opportunities address issues related to the masses—social enterprises that find solutions for India’s largely underserved but incredibly aspirational ‘next billion’. Some optimistic Family Office investors view impact investing through the same investment lens as they do for any other asset class. This is a definite win for the impact investing ecosystem as these investors function as evangelists, strongly advocating the ability for impact investing to provide commercial returns and impact. Equally, many family offices and HNIs continue to have reservations regarding the ecosystem. They repeatedly point out the industry’s inability to demonstrate measurable results. Moreover, a lack of common frameworks and a common language to measure the impact make greenwashing a real concern. To add to this, many families feel that impact funds and enterprises often lack skilled professionals with adequate on-the-ground experience to understand the nuanced challenges of these businesses.


Additionally, potential investors face product related barriers because of a lack of good quality investment opportunities across the risk-return spectrum. Domestic investors have not been sufficiently exposed to the wide variety of impact investing opportunities available in the country. They range from equity investments into funds and social enterprises to less conventional social finance models such as development impact bonds (DIBs), loan guarantees and pay for success models.


India is not lacking in socio-environmental issues and there is enough and more room for philanthropic, impact, and commercial capital to co-exist and complement each other in alleviating socio-economic issues. Wealth advisors to family offices and HNIs can help their clients contribute to real social change by earmarking ‘sustainable development capital’ in a client’s portfolio for the broader spectrum of grants, direct investments in social enterprises and blended finance. Exposing families to opportunities across this spectrum will help broaden the perspective and give clients multiple options to deploy capital towards social development. Equally important is to be able to create metrics for clients that enable them to measure, monitor and evaluate the “impact quotient” of their investments.


As India inches closer towards achieving the UN Sustainable Development Goals and climate commitments made at COP26, unlocking Family Office and HNI capital for sustainable development can be a game-changer. It will require a concerted effort amongst wealth managers to channelise domestic capital to the social sector. It will mean educating and training our relationship managers, working with partners to source investment opportunities, and being able to diligence social enterprises through both the commercial and impact lens. As investors, we applaud the unicorns that get created, but can we also applaud those social enterprises and impact funds that aspire to touch a billion lives.


Source: Forbes India

New-age wealth management: Personalised, tech-enabled and agile


“The only constant in life is change” – Heraclitus.


If there is anything that the current environment has taught us, it is that change is inevitable and often, unexpected. At the same time, it has underscored the importance of being agile and future ready. For the wealth management industry, winds of change had already started blowing, taking the industry towards a more technology-enabled future. In the last few years, technology has driven many changes across various sectors. Digitally-powered solutions and digital interactions are changing the way companies work and provide services.


Besides the technological changes, wealth management firms are doing well to keep up with the changing needs and attitudes of investors. The attitudes of investors across different age groups and their expectations from wealth managers is currently undergoing a transformation. Add to that, the complexity of the economic environment and the need to stay tethered to the traditional values of trust and transparency.


Let’s dwell into some of the paradigm shifts taking place in the wealth management industry:


New generation of investors


A huge amount of global wealth is currently changing hands from the previous generation to the new generation. Shaped by dissimilar experiences and brought up in a different environment, the new generation of investors has markedly different expectations from their wealth managers when compared to the previous generations. They want to be respected and treated as unique individuals. They seek personalised recommendations based on their financial goals and liking. This new breed of investors doesn’t shy away from doing their research before investing in any investment option. They also discuss investment options with their friends and colleagues and are open to their suggestions. While in the past, advisors and wealth managers interacted with their clients through face-to-face meeting and telephonic conversations, the new generation of investors expects their money managers to be available across different channels at any point in time, in demand.


Goal-based planning


The industry has been witnessing a slow migration from product-based to solution-based offerings. Clients today demand holistic and end-to-end solutions that meet their various wealth related needs. These could range from fund raising for an entrepreneurial venture to creating a sufficient corpus for the child’s foreign education. Instead of providing products or solutions in silos which only meet the one-time needs of the client, wealth managers are undertaking the customer journey along with the clients. This requires assessing the client’s risk profile, understanding her multiple life goals, determining the return requirements, creating an asset allocation strategy that meets these requirements, and continuous monitoring to adjust for changes in the client’s circumstances or the external environment.


Embracing digital


Digitally-powered solutions are slowly becoming the norm, rather than a competitive advantage. Covid-19 has accelerated the adoption across industries. As individuals increase their digital engagements, the wealth management industry, which was traditionally more of a human touch business has now turned phygital. Technology has the power to transform businesses, elevate interactions and user experience, and create customised solutions that generate high value and client satisfaction. Wealth management companies are now looking at artificial intelligence (AI) and machine learning (ML) powered tools to collect and harness data. This helps wealth managers create personalised solutions for their clients. Digital tools are now being extensively used to enhance reporting, analysis, and client interactions. Technology, if harnessed well, will go a long way in further enhancing the human interactions.


Retirement & Legacy Planning


Wealth managers serve clients across the wealth spectrum and cater to their multiple needs. One of the biggest concerns that the wealthiest clients have is whether they will outlive their assets. This is now becoming increasingly complex due to longer life expectancies. the increasing cost of medical care, and concerns over the value of their assets. At the same time, many wealthy individuals wish to have a proper plan in place to pass on their wealth to the next generation. To effectively meet these requirements, wealth managers are engaging with clients early on, to balance their short and long-term financial goals.


The wealth management industry is witnessing several changes. These changes will inevitably make it easier for investors across different age groups to invest and fulfil their financial goals. Yet, some things remain the same—like staying agile, adapting to new imperatives and ensuring trust, transparency and client-centricity are not compromised.


Source: Forbes India

How do SIP’s work in a Smallcase?

Risk appetite and risk tolerance are one of the most important criteria in selecting investments. Let’s look at how to match them in Smallcases.


How do SIPs work in a Smallcase?


Well, the answer would depend on who you ask. If you ask an expert stock investor who understands the technicalities of the stock market, can do extensive research, and then pick the right stocks, the answer would be the former. However, ask other investors who don’t have such hands-on knowledge of the stock market and the latter would be the most preferred choice.


Most investors fall in the second category, and so, for them, Smallcases prove to be ideal investment avenues. A Smallcase is a readymade portfolio of stocks and ETFs that follows a specific theme or investment idea. Most are handcrafted carefully by astute fund managers and Sebi-registered investment advisors. For example, the Deeva Ventures Flagship is a Smallcase that consists of 15-20 handpicked stocks from the Nifty 500 index. Similarly, Deeva Ventures’s Multiplier Smallcase consists of small and mid-cap stocks that have the potential to deliver exponential returns.


Smallcases, thus, help you invest in a well-researched portfolio of stocks to earn better risk-adjusted returns. They are also constantly monitored by experienced analysts so that the portfolio can be recalibrated with changing market dynamics. This ensures that your investment stays relevant in all market conditions.


Investing in Smallcase

When it comes to investing in a Smallcase, there may be a minimum investment amount that depends on the Smallcase that you pick. This further changes with the market as the cost of one share of each stock or ETF that comprise the Smallcase changes. For instance, Deeva Ventures’s Multiplier Smallcase required a minimum investment of Rs.46,987, while the Flagship Smallcase required Rs.24,676 when we compiled this article. Check out their prices now.


There is no maximum limit to investment or the number of smallcases you may hold. You can invest in a Smallcase in a lump sum or in regular installments through SIPs (Systematic Investment Plans).


However, entry into SIP-based investments in Smallcases is slightly differently structured from SIP investment in mutual funds. Both, nonetheless, allow you to invest affordably and create a disciplined investing habit that may serve you well in the long term.


How SIP investing works in Smallcase?


Before we get into how SIPs function in Smallcases, note that Smallcases are a basket of stocks and ETFs with dynamic price movements. And unlike mutual funds that permit one to buy partial shares, investors need to purchase full units of the stocks. That is, if a Smallcase portfolio has stocks of 10 companies with 10 units of shares each (equal-weighted), the investor will need to purchase all the 10 stocks at the price of the day, even though he need not purchase them in the same weightage (no compulsion to buy 100 shares). The minimum investment amount is thus dynamic in nature and updated in real-time, in line with the daily price movement of the underlying assets.


So, the first investment in a Smallcase needs to compulsorily be a lump sum investment that adheres to the minimum investment requirement for most Smallcases. You may thereafter activate a SIP in it for no additional charges. This means that a SIP in Smallcase is possible only in Smallcases that you have purchased and subscribed to.


The first investment amount, called the Minimum First Investment Amount, is the least amount required to invest in all the stocks of the selected smallcase as per the weights.


Once added to your portfolio, you can then proceed to establish a SIP in it. Note here that your SIP amount will be different from your Minimum First Investment Amount.


According to Smallcase, you can start a SIP for an amount less than the minimum investment amount for the smallcase, if the minimum investment amount is more than Rs 10,000.


Of course, the SIP amount is less than or equal to the minimum investment amount in Smallcases where the minimum investment amount is less than Rs 10,000.


The SIP frequency, on the other hand, depends on the Smallcase that you choose. Almost all Smallcases allow monthly SIPs, while some schemes, like Deeva Ventures’s Smallcases also allow weekly, quarterly and annual SIPs for easy investments.


Another point of difference with mutual fund SIPs is that when you set up a SIP in Smallcases, you essentially set up only an investment reminder. Your investment is not really automated. You simply get a reminder to invest in the SIP instalment. That said, Smallcase facilitates a 2-click process to invest in further SIPs.


Why are SIPs beneficial?


SIPs are a beneficial way of investing in Smallcases. Here are the reasons why –


• They are affordable

The primary reason that makes SIPs favourable is their affordability. With SIPs you can invest in the desired Smallcase without feeling a pocket pinch or disturbing your budget. It allows you to invest in small and affordable amounts, regularly, and still create a sizable portfolio of stocks.


• You don’t have to wait for the right time to invest

Investing in the stock market is all about picking the right time to enter so that you can buy low and sell high. Picking the right time is, in effect, a challenging task. You need to monitor the markets closely and speculate on the time when the prices fall so that you can enter.


• Do you have the time and know-how for the same?


With SIPs, you don’t have to time the market. You can invest at predefined intervals without hassling over the right time.


• If you invest with a long-term horizon, compounding grows your corpus

Long-term horizons can do wonders for your investment. You can cash in on the benefit of compounding, which helps multiply the returns that you can earn. With SIPs, as you invest affordably if you give your investment time, you can accumulate a considerable corpus for your financial goals through the power of compounding.


• Get the benefit of rupee-cost averaging

SIPs give you the benefit of rupee cost averaging. In rupee cost averaging, the effective value of periodic investments is neutralised, positively impacting your overall cost of investment. When you invest in SIPs, you invest at different times and at different rates. The aggregate rate, then, gets averaged out. In falling markets, you end up buying more, and in rallying markets, you tend to buy less. These two purchases balance each other out, and the investment becomes more cost-efficient.


• Invest in a disciplined manner

SIPs inculcate a disciplined investment approach. Imagine getting reminded at periodic intervals to invest!


With SIPs, you can regularly invest, without fail, so that your modest investments accumulate to a sizable corpus that helps you fulfill your financial goals.


SIPs, thus, are quite beneficial and help you invest in the desired Smallcase without worrying about its affordability. You can also continue to opt for multiple SIPs in multiple Smallcase portfolios so that you can diversify your investments.


Some things to keep in mind about SIPs

 Deeva Ventures

• While SIPs allow ease of investing in Smallcases, here are a few points that you should keep in mind-



• Starting a SIP in a preferred Smallcase portfolio is quite easy. You can invest online and click on the option of SIP when investing.


• You only get an investment reminder on the SIP due date, and you have to invest manually. Some brokers, however, are automating the SIP investment wherein the amount gets debited from the registered bank account and is invested in the portfolio.


• The minimum SIP amount depends on the Smallcase that you choose. It is not uniform.


• You can stop the SIP at your discretion. There is no lock-in period


The bottom line


Understand what SIP investment is all about in the context of Smallcases. Know how it works and how you can start your very own SIP. Choose a profitable and consistently performing Smallcase and start a SIP to get the maximum benefits that SIP investments can provide. You can check out Deeva Ventures’s Smallcases that have a good portfolio and can help you create a corpus worthy of your financial goals.


Source: Tejimandi

Why Direct Stock Investors Should Invest in smallcases

If there is one thing that can be said about direct stock investors, it is that they are certainly not averse to risks. Someone who invests directly in stocks does so with the understanding that the stock markets are going to be volatile. There will be bad days along with the good days, but as long as the good ones outnumber the bad ones, the investor would consider himself or herself to be successful.


Direct stock investors embrace market volatility and take investment decisions based on these ups and downs. But there are a number of reasons why direct stock investors would also benefit by investing in smallcases.


Portfolio-based investing


Investing in a portfolio of stocks has proven to be more beneficial than investing in 1 or 2 stocks. A portfolio allows you to diversify across market segments and capitalizations. Not only do you benefit from the upside in different stocks, but a portfolio also allows you to stay protected from the downside in a particular stock.


Investing in readymade themes & strategies


Direct stock investors follow the news and purchase stocks of companies that they believe will do well. This can easily be done when investing in individual stocks, but not when an investor is following a theme or an investing strategy. After all, tracking news & updates for more than 10-15 stocks is time-consuming. A smallcase will allow you to invest in ready-made themes & investing strategies that have been created by SEBI licensed professionals. For example, if you want to invest in companies that own brands which India loves, we have the Brand Value smallcase.


Research and analysis by experts


One of the biggest hurdles for stock investors is taking the time and effort out to research stocks. Fundamental analysis of companies is an important step before buying its stocks. This, of course, is not easy to do and can take away a lot of the investor’s resources. But not if you invest in a smallcase. The hard work is done for you by the smallcase team of researchers and analysts. The stocks in every smallcase pass our stringent proprietary filters so that investors don’t have to worry about making the individual choices.


Investing in smallcases comes with many other benefits. They are transparent, customisable and straight-forward.


smallcases come in different types–thematic/sectoral, strategy-based, asset-allocation based, and those based on smart beta. Check them out and begin investing in the ideas you believe in. And if you still haven’t found a smallcase that’s right for you, remember that you can always create one yourself very easily! Add the stocks that you have in mind, see a simple-backtest before investing, and then conveniently buy/sell all stocks in 1-click – learn more about the create a smallcase feature here.

Source: SmallCase

Dos and Don’ts of investing in smallcases?

Tips to stay on track with your smallcase investments


👍 Do’s


Start SIP: SIPs are great for long-term goals. You can start a SIP while investing in a smallcase, or anytime later after investing


Track News & Dividends: Every smallcase comes with a performance summary of Index Value, Dividends, News and more


Watchlist: If you want to track and monitor the smallcase before investing, you can add it to your Watchlist


Rebalance Regularly: Rebalance updates keep your portfolio aligned with the original idea


Check Portfolio Health: Portfolio Health Helps you achieve maximum efficiency in your wealth creation journey



👎 Don’ts


Don’t skip SIP or Rebalance updates: Make sure that you always complete your SIP and apply the rebalance updates so that your financial goals remain on track


Don’t exit too soon: smallcases are built for long term investing, hence it is ideal to give your portfolios time to perform and grow your wealth


Don’t sell stocks directly on your broker platform: For all transactions relating to smallcases transact directly on smallcase platform


Don’t invest and forget: Even though smallcases are long-term investments, they should be evaluated periodically to make sure they are on track