Oppo Kash – Can This App Get You Financial Freedom?

Technology has become an enabler, a boon, and an indispensable part of our life.

Also, being a part of the financial services industry for over 16, I keep abreast with the new trend of app-based investing and robo-advisory platforms - the fintech world.

Every day, I hear about fin-services being made available through an app-based investment platform or via robo-advisory platforms (many a time without proven expertise) to end-users.

Recently, I came across the news of Oppo-a well-known cellphone manufacturer --having joined the bandwagon with app-based investing with 'Oppo Kash'.

'Oppo Kash' will come as a pre-installed app for Oppo smartphone users, and it's likely to have stickiness among Oppo users. This app can also be downloaded by non-Oppo users from 'Google Play Store'.

With 'Oppo Kash', Oppo has forayed into financial services. The intent is to serve as a one-stop-shop for financial products and reach out to millions of financial services consumers.

Over the next one-and-half years, the company aims to have product/service offerings across six segments -Payments, credit, investing, insurance, financial education, and financial well-being score among others.

But, my point is: Do they have the expertise to help us understand what's good or bad for our investments?

For example, many fintech companies have already built platforms to offer various financial products such as payment wallets, mutual funds and insurance policies among others. But not all providers are putting all our interest at fore -- by offering the products with the best advice.

I will speak a little more about mutual funds with respect to 'Oppo Kash'...

Along with ICICI prudential Mutual Fund, Oppo Kash has launched 'Freedom SIP' (Systematic Investment Plan) to help investors start SIPs as low as Rs 100 in equity and hybrid mutual fund schemes, in the Regular Plan, for long tenures such as 8, 10, 12 and 15 years. On the completion of the tenure, the proceeds can be switched into debt schemes.

In short, 'Freedom SIP' targets investors in their 30s and 40s who are looking for retirement planning.

Why opt for a Regular Plan to invest in a mutual fund scheme when the option of a Direct Plan is available?

Also, can 'Oppo Kash' by collaborating only with one mutual fund house for 'Freedom SIPs', act in an unbiased manner?

Furthermore, how will investors be able to diversify their mutual fund investments?

Diversification is one of the basic tenets of investing and should be practised even across fund houses.

I believe, prudent and holistic research (based on a host of quantitative and qualitative parameters) is necessary to select the best mutual fund schemes. Remember, mutual fund should not be chosen looking at past performance, because it is not necessarily indicative of future returns.

If you as investors take enough care to select mutual funds prudently and choose a Direct Plan --- where the expense ratio is lower than the Regular Plan --- you would be able to compound wealth relatively better. This, in turn, would help you build a relatively bigger corpus for envisioned financial goals and perhaps even build that corpus sooner -- offering you the financial freedom in its true sense.

Keep in mind that, 'Oppo Kash' is an app-based platform proving access to financial services under one umbrella and may not necessarily help you select best and suitable mutual fund scheme. When mutual funds (or any other financial product for that matter) are pushed with specific transaction targets in mind, ask yourself, as an investor, does it do justice to your investments.

For fintech companies enabling you to invest in financial products under one umbrella is a selling point. Even if you lose money by investing in a mutual fund they have tied-up with; it doesn't cost them much. Their core competence is to develop and run hardware and enabling infrastructure.

Certain fintech companies dabbling in the unchartered territory of finance is just as dangerous as a well-known cricketer offering advice on football.

In the tech world, cell phones manufacturers and fintech companies are coming up with even more innovative ecosystems. That's fine. But whether it is offering an ecosystem that makes it effective for, you, the investor, is the question to ask.

Hence, be an intelligent investor.

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Warm Regards,
Rounaq Neroy
Editor, Daily Wealth Letter