By Nesil Staney
Centricity, a wealth-tech firm with presence in 21 states, has onboarded over 10,000 financial products distributors with volumes of Rs 8,000 crore in its two years of existence, said co-founder Aditya Shankar.
The firm, which currently has 35,000 retail and 150 family office clients, aims to generate Rs 20,000 crore in distribution volume by March, he said.
“With focus on private wealth and a rapidly expanding pan-India financial product distributors and branch network, we are poised to onboard 15,000 partners, serve 500 family offices and cater to over 1,00,000 retail clients,” Shankar said.
India’s wealth product distribution business is estimated between $1 trillion and $1.2 trillion as of FY24, and projected to reach $2.3 trillion by FY29 at a CAGR of around 16%. This is fueled by a rising affluent population, increasing demand for alternative investment products, deeper penetration into Tier II and III cities and digitalization.
This year, over 100 ultra-rich families from India and beyond have become clients, said Shankar. Distribution income, he said, can significantly vary based on products. Advisory fees, which are charged at the overall portfolio level, generally start at around 50 basis points and can fall to as low as 4-5 bps. In contrast, distribution income can reach up to 75-100 bps, he said.
Equity products typically offer distributors an annualized trail fee ranging from 75 to 100 bps across mutual funds (MFs), portfolio management services (PMSs) and alternative investment funds (AIFs). Credit mutual funds usually pay around 60-75 basis points to distributors, while credit AIFs’ distribution income can go up to 100 basis points.
Currently, HNI business accounts for 60% of Centricity’s overall business. “As part of our strategic growth, we are looking to hire 40-60 private bankers over the coming months,” Shankar said.
The regulatory environment is poised for a change with regard to wealth distribution. “Looking at models from Singapore and Hong Kong, it is anticipated that regulators will begin to focus more on the academic qualifications of advisors. This may involve requiring certain certifications to be obtained before advisors can work with clients, as well as establishing minimum tenures for those managing higher-value client portfolios,” said Shankar.
The firm has entered the insurance distribution business and acquired a broking license and is actively integrating Generative AI tools into proprietary platforms. As part of future plans, they aim to set up its own NBFC to offer digital lending solutions.