Tuesday, January 08, 2008

Startup in the Finance space: Park Financial Advisors

Next in the series on upcoming startups from India, I bring to you a dialogue over coffee with one of the founders - Nikunj of Park Financial Advisors operating in the financial domain.
It was founded by four young entrepreneurs from IIM-A (IIM- Ahmadabad) who left their cushy jobs from India and USA to start Park Financials.

Chat transcript:
Me: Tell me something about your history before Park Financials happened?
Nikunj: Well, I did my graduation from IIM-Ahmadabad (2004) and worked for a couple of years in US with American Express Financial Advisors. After that, I came back to India to take advantage of the immense opportunities thrown open by the rapid pace of India's growth. I was with Kotak Institutional Equities Trading for a year before starting up our own company.

Me: So you graduated from the best MBA College in India and got a dream job. But when and how did this “entrepreneurial bug” bit you that led you to leave your cushy and well-paid job?
Nikunj: The idea of starting up a company was always there in my mind since IIM-A days, but when and where was the question. I decided to have some experience to learn valuable insights on the industry. In June last year(2006), four of us - IIMA batch mates got together, and gave final shapes to our plans. By October, we left our jobs to formally started Park Financials.
We felt that there are very few companies in the market who provide informed retail wealth management services. Also, this sector is booming and has the potential to grow very big. Moreover, having learnt some of the best practices followed in the wealth management services industry in US and how this industry works over there, we felt it's the right time we start something in this space.

Me: So tell me about Park Financial Advisors and the product launch.
Nikunj: We provide complete financial planning which includes incorporation of the future financial needs and goals. We provide a detailed analysis from our in-house proprietary research system in the form of 360 page report.
We provide you the tools, methods and guidance in evaluating your finances, provide a platform for you to see the state of your finances over time and assess the impact of your today’s decisions on your future.

Working with the clients, we evolve an integrated financial plan for them. We develop an understanding of your current and expected lifestyle, expected milestones, dreams and aspirations and your ability and willingness to take on risks.

At the end of the dialogue you will have a holistic plan telling you
• Milestone-setting and planning
• Medium term cash flow analysis
• Long term net worth projections
• Budgeting and lifestyle planning
• Retirement planning
• Investment advisory
• Insurance advisory
• Loan advisory
• Tax planning and optimization

Me: What is your USP?
Nikunj:
1) Our analysis is based on thorough research, which is again backed by sound analytical models.
2) We are independent and neutral as opposed to the services provided by some of the banks who may sometimes overlook the best interests of the clients and recommend their own products.
3) We've tie-ups with almost all mutual funds
4) We cover and give advice on all asset classes like real-estate, equity markets and fixed-income instruments as opposed to others who are generally limited to 1-2 asset classes. For Example, your broker and his company may be able to provide only the advice on Equity markets. But, we can provide the comprehensive and hence more complete financial planning for our clients.



Me: Who are your target customers?
Nikunj: Right now, we are targeting the affluent retail segment, returning NRI's and the software engineers - that is why I'm here in Bangalore (with wide grin on his face)

Me: What is your revenue model like?
Nikunj: We make money from two sources:
- Upfront fee from the clients for financial planning
- Commissions on purchase of financial assets like mutual funds

Me: What are your plans for growing your market share? What are your constraints?
Nikunj: We’ve tied up with a lot of software companies and organize financial planning workshops for them on a regular basis.
- We publish research articles in areas like investment management and planning in the media.
We do have to make an extra effort as we do not have a big brand name right now, but again our experience and the services we provide compensates for that.


Me: What were the major difficulties-challenges you faced when you were starting? - on people-team, funding, technology.
Nikunj: Since it is a positive cash flow business and we don't need much capital for it, we didn't had much problems with regards to funds.
However, the most challenging part in running the company is to hire new people as the salary expectations in the sector is going through the roof.
Coming to technology, we've outsourced some of the technology needs, and some of it is taken care by us.

Me: Did you ever feel let down, and at that time what helped?

Nikunj: It has been a good experience so far, and has provided us with fabulous learning opportunities.


Me: Advice to future entrepreneurs.
Nikunj:
-- I think most difficult part is to decide and plan when to quit and jump into your plans full-fledgedly. But, believe me, once you do, everything else falls in line.
--- Patience is the key; you have to scale it up slowly, taking one step at a time. If you plan to make it big in one day, that is not going to happen. So my advice - hang on.
--- Facing the Real world is very different from the experience you may have while in the corporate circles representing your company. People like to work on their own pace. Even, seemingly easy tasks would become very difficult once you leave your company. For example, you may even have to wait for 2 hours to meet someone, who otherwise would have come running to your place if you would have been working for some big company. So, my advice is to come prepared for this before jumping into the startup bandwagon.


Me: How about the VC funding? Have you already got it or want to go for it?
Nikunj: We are mulling over some funding opportunities and some talks are going on in this direction. Hopefully, we should be able to close them pretty soon.

Me: Thanks Nikunj for the wonderful insight. All the Best!!!!
Nikunj: Thanks!!