The RBI Governor Shaktikanta Das recently recommended that fintech players should set up a self-regulatory body. This suggestion is hailed by a number of fintech players including Yashoraj Tyagi, CTO of Sqrrl, a wealth management platform, who touts this as an ‘exciting opportunity’ that can be used to benefit consumers as well as the industry.
In an email interaction with MintGenie, the alumnus of Haas School of Business, University of California, Berkeley also shares his thoughts on the financial challenges faced by today’s millennials.
He also speaks about an array of investment options such as mutual funds, systematic investment plans, goal-based investing and other investment products that are offered by the fintech platform he leads.
Additionally, Tyagi shares a word of caution for the investors who have a tendency to borrow money to invest and says that this practice (of borrowing to invest) carries inherent risks.
Edited Excerpts:
What are your views on the current saving and investment pattern of millennials that you may have across during your experience at Sqrrl? Do you think they are making adequate investments during their youth, or is there a need to spread awareness among them?
We have observed diverse savings and investment patterns among millennials, largely influenced by their unique financial circumstances.
While some millennials are actively preparing for their financial future through investments, others face immediate financial challenges, potentially limiting their savings capabilities.
The adequacy of their investments varies widely based on individual goals and situations, underscoring the importance of financial education. Millennials possess the advantage of time, enabling them to leverage the benefits of early investments for long-term wealth accumulation; however, it's crucial to acknowledge their varying risk tolerances and preferences.
In India, number of investors who invest directly in the stock markets is minuscule. As a result, a slew of safer investing routes have fancied the investors — from mutual funds to PPF, where investors get some exposure to equity without having to worry over timing the market on their own. Is Sqrrl also attempting to leverage this phenomenon?
Certainly, Sqrrl actively embraces the trend observed among Indian investors who are increasingly seeking safer and more accessible avenues for participating in equity markets. Similar to the convenience offered by mutual funds and PPF, our platform serves as a viable alternative for individuals who have reservations about engaging directly in the stock markets.
The platform's user-friendly interface alleviates concerns related to market timing and the complexities of self-managing investment portfolios. We offer an array of investment options, encompassing mutual funds, systematic investment plans (SIPs), goal-based investing, round-off investments, lump-sum contributions, and various other investment products.
Recently, RBI governor said that fintech players should set up a self-regulatory body. What are your views on this?
Absolutely! The RBI governor's suggestion for fintech players to establish a self-regulatory body presents an exciting opportunity for collaboration and responsible innovation within the financial technology sector.
It shows a commitment to finding solutions that benefit both the industry and consumers alike. By taking the initiative to create their standards and best practices, fintech companies can contribute to a safer, more transparent, and more inclusive financial ecosystem.
Is it advisable for a retail investor to borrow money to invest in equity?
Borrowing money to invest in equity can be a wise move if it leads to increased earnings for the investor. For example, if someone secures a low-interest loan from a digital lender and invests it in a high-yield stock, they may earn more than enough to cover both the principal and interest payments. In such cases, opting for a personal loan for stock market investments can be a prudent choice.
However, it is crucial to conduct extensive market research and assess the expected gains to ensure they are significant enough to not only meet the loan repayment but also leave a surplus.
Taking a loan to invest in equities carries inherent risks, but one can minimise these risks by assessing and managing them wisely.
Can you explain how investors can invest in mutual funds via Sqrrl app?
Investing in mutual funds through the Sqrrl app is a seamless and compelling choice for investors looking to grow their wealth efficiently. With a user-friendly interface and a diverse range of mutual fund options from reputable asset management companies, this app empowers users to take control of their financial future.
The process begins with a quick and easy setup, where you can complete your profile, assess your risk tolerance, and define your investment goals.
Once you're set-up, the app offers detailed insights into each mutual fund, allowing you to make informed decisions based on historical performance, fund manager expertise, expense ratios, and more.
