In the past few years, many online Mutual Fund investment portals have come about which have simplified the process of investing for individuals. This has been hugely beneficial for investors, as gone are the days when one had to go to a bank branch in order to be able to invest in a Mutual Fund.
However, not all portals are the same - some are geared more towards Do-It-Yourself investors, while others are aimed more towards the general populace.
Scripbox is one such popular portal which allows users to invest in a pre-selected list of Mutual Funds. Some of our prospective users have asked us how we compare with them.
While Scripbox aims to simplify the process of investing by taking care of the Mutual fund selection part, there is much more to successful investing than just that. Hence, Goalwise has been built to do not only what Scripbox does, but much much more.
Before you actually begin investing, it is good to do some thinking about the purpose of the investment and when you might need the money back. Based on the why and when, you need to know how much to invest in equity, how much in debt and how all of this ties in with your financial goals in life (like early retirement, children’s education etc).
Once you’ve planned that out and started investing, you have to take care of all aspects of investing like fund-selection and review, risk-profile based asset allocation, rebalancing not just between Mutual Funds but also between equity and debt, risk management when you are about to achieve your goal etc.
Scripbox does manage the fund selection part, but none of the other stuff, which is as important, if not more. Most of us will still need a financial planner to help us with the rest of the pieces of the process.
So, if one just wants to invest without much planning, then one can go with Scripbox (or even FundsIndia for that matter).
But for the 99% others who don’t want to hire an expensive financial planner, but yet want to avail most of the benefits together with a set-and-forget system, this won’t be ideal. What you want then is a service that does the following two things well for you:
Getting higher returns automatically - Selecting the best Mutual Funds that actually have a good chance of giving higher future returns. This requires substantial expertise beyond just superficial analysis. And the selection strategy should be well-supported by evidence and results (ongoing and historical).
Also, it is not a one-time process. In order to fully benefit from a good selection strategy, you need to switch your investments from the old funds to the new funds periodically. Few investors actually have the time and inclination to do this themselves, so your platform should be doing this for you automatically.
Start-to-end Goal-based investing - Investing according to your goals (tax-saving, retirement, child’s education, or surplus wealth creation etc) is one of the best ways to take control of your financial life. Almost all financial advisors recommend this as their preferred way of advising their clients.
Different goals have different targets and time horizons, and hence need to be managed differently. For example, for a 35-year old, a retirement goal has a much longer time horizon than say a goal for his daughter’s education for which the money might be required in the next 10 years. These two goals need to be managed separately - with the education goal moving from equity to debt more quickly than the retirement goal.
This is the most critical (and tedious) aspect of goal-based investing and doing it manually can be both expensive and inefficient. Ideally, your investments should be automatically switched from equity to debt as you get closer to your goal, so that your money is safely available when you need it.
A platform that is easy to use and does the above two things well should be great for most of the investors out there.
Full Disclosure: A couple of years back, I considered using Scripbox for my own investments but then decided against it because it lacks support for goals-based investing. Manual rebalancing between equity and debt wasn’t a lot of fun either, and I had to manage my own financial plan as well.
I wanted a set-and-forget system based on goals which will take care of fund selection, asset allocation, rebalancing and goal-based management on its own without me having to do anything. Ultimately, with a team of like-minded people, we built our own platform that does ALL of this automatically. We have now made the platform available to everyone at www.goalwise.com.
Also, here is a table summarising the features of Scripbox and FundsIndia (a popular Do-It-Yourself investment platform), and how they compare with each other and Goalwise:
Check us out at https://www.goalwise.com and let us know what you think.