Launching Assisted Advice

On 3rd July 2020, Securities & Exchange Board of India released amendments to Investment Advisory regulations, following a discussion paper earlier this year. This will mean changes to our business model. We are planning to split our service into two: Assisted Advice (AA) and Do-It-Yourself (DIYA) advice. We have already launched AA. The changes to the existing model to DIYA will take some time.

Drawing upon our successful experience with Portfolio Management Service, launched in December 2019, AA will monitor your investments continuously on a personalised basis. AA will be just like the PMS, where we take responsibility for investing your money and you do not have to worry about creating your own plan and tracking. The only difference is, you will have to do the transactions and assets stay with you unlike PMS where we execute the transactions and assets are held by the custodian. The AA process is as follows:

Step 1. Setting up: This will involve risk profiling, signing an Investor Agreement, deciding which investments you want advice on (called Assets under Advice or AUA) and paying our fees for two quarters in advance.


GST at 18% will be additional.
Step 2. Portfolio Analysis and plans: Once we have the investment data with us, we will customise our advice and upload / email for you to review.

Step 3. Interact: You can offer your feedback and keep interacting with us until we finalise the plan.

Step 4. Implement: You can start implementing our advice. a. Stock Transactions: For the transactions in stocks, you can use your own broking firm and share the transaction details with us. Zerodha customers can transact from our website, directly and allow Zerodha to share the data with us. b. MF Transactions: This will follow the same approach as stocks. We are integrating with Coin of Zerodha and later will add BSE Star MF for you to transact directly.

Step 5. Tracking and Monitoring: We will monitor portfolio performance and track your goals every quarter.

The current service, which consists of knowledge, recommendations, tools and queries will become a Do-it-yourself advice (DIYA) with some important changes still under consideration. We will alert you when we have finalised the changes.

Some the problems of the existing model are:
1. Clients may not follow our recommendations
2. Even when they do, we have no control over what they do and so we cannot actually “deliver” the results of our recommendations.
3. To make it effective, we are going to offer execution and tracking. But even after this, the two points above will not be addressed.
4. Hence, the advice remains a model advice, not what is executed in practice.

Our new service AA addresses all these issues. The following table explains the differences between the various services we are offering:

Our recommendation: We encourage you to consider the assisted advice model as your preferred choice because of the more active interaction, personalized nature of the service, active management and tracking of your actual investments.

We have already started on-boarding customers for AA. If you are interested in exploring this further, please do email us at [email protected] with “Interested in AA” as the subject line.

I am excited about this new service and look forward to helping with your investments soon.


Debashis Basu
Co-founder, MAS.

FAQ
-Need for this service and process
Why have you launched this service?
In our interaction with clients, we noticed that many often do not follow our recommendations, especially when it comes to selling stocks. We have no control over what they do and so we cannot actually “deliver” the results of our recommendations. Hence, our advice remains a model advice, not what is executed in practice. This is why, despite getting the same recommendation, every subscriber gets a different return. Assisted Advice (AA) will remove the lacuna. We will ensure that clients stay on course to achieve their objectives. The two most important features of AA will be to:
  1. We will track client portfolios and ensure they execute the recommendations
  2. Follow a more active style of investment management Controlling the outcome of our recommendation is possible only in PMS and not in current investment advisory or stockletters.

If you are confident of following our recommendations with the correct weights / exposure, entries and exits you will not need this service.

If I opt for AA, will it be advantageous compared to following your stock letters and MF recommendations?
Yes, we will actively manage your portfolio. Also, there are too many stocks in the 4 stockletters combined. We will pick and choose from them and also from other stocks.

What will be the mode and frequency of interaction?
It involves continuous monitoring and management of your portfolio (similar to PMS). In AA, you will carry out the transactions and assets will stay with you. The interaction can happen anytime when:
  1. We need to communicate with you about your goals, plans and investments plans
  2. You have something specific to enquire about the strategy and investments we are pursuing.
All interactions will have to be written because SEBI requires us to maintain all records of advice.

Will the advice be weekly?
No, It will be according to needs of your plan, the need to change the portfolio based on external events and buy and sell signals generated for stocks and mutual funds. It can be in the middle of the week or there may be no advice for weeks.

How will you deliver the recommendations?
It will be through the Ask Us forum. When we post a recommendation, you will get an email alert.

+What is included and not included?
+Fees & Minimum Investment

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