One feature, three perspectives

January 29, 2011 . Srikanth Meenakshi

As you are probably aware, we recently introduced a new feature on our platform called Flexi-SIP (more details here). Quick summary – this feature enables investors to setup a range of amounts for the SIP investments and be flexible about how much they want to invest every month.


We have been thinking about this feature for a couple of months now, and it finally saw the light of the day a few days back. However, when talking about this to people, it was interesting to note the different ways that people viewed this feature.


The first perspective was our own – we were getting emails consistently from investors about how they can modify the payment for a SIP installment or how they can increase the SIP amount etc. And, every time we were forced to tell them the same thing – for a particular SIP, the amount, date and bank account cannot be changed. A ECS mandate is registered for a particular bank account for debit a specific amount on a fixed date of the month. If any of these three change, one would have to stop and re-do the SIP. We were tired of giving this answer and identified this as an issue that could do some creative problem-solving. We thought up Flexi SIP to solve this issue.


The second perspective was from an investor. A few days after we launched the product, I was on call with an investor talking to him about setting up a SIP. This person had not invested in mutual funds at all, and was new to making monthly investments. He had all his investments in fixed deposits. Throughout the conversation, he seemed unsure about how much money he would be able to save every month. He was asking if there would be penalty if he does not pay for a certain month, and what if he needs the cash etc. And, immediately I thought that the Flexi SIP product would be perfect for this guy! I asked him how much money he was confident about saving every month. He replied saying that he could always save Rs. 2000, but sometimes he could save as much as Rs. 5000. Bingo! I explained to him the Flexi SIP feature and told him he could setup a regular amount of Rs. 2000 and a max limit of Rs. 5000, and be done with it. He was thrilled.


The third perspective was from a fellow advisor. As soon as I was done explaining the product to him, he gave me a sly grin and said, ‘so, you’ve really become a mutual fund trading platform – you have created a tool that people can use to invest based on where they think the market is – high or low’. That was interesting and, I realized, also true. Investors can setup a SIP with a regular amount and a maximum. If they think the market is low, they can hike the investment amount, and if they think it is high, they can go with the minimum. Honestly, I am not confident that that kind of a usage of Flexi-SIP would be really profitable to the investor over the long term, but the choice is there.


So, a single feature could be viewed in three ways – as a way to increase your SIP amount without going through paperwork, as a way to control your monthly savings/investment pattern, and as a tool to try and time the market.


Essentially, a feature that works well for both a beginning investor as well as a pro!



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