Nithin Kamath: India needs a stronger network of registered investment advisors: Nithin Kamath

Kamath’s comments assume significance at a time when market watchdog Securities and Exchange Board of India (Sebi) has been looking to crack down on unregistered ‘finfluencers’, or financial influencers, in the country.

Further, the regulator is also looking to limit the interactions between regulated entities and these online ‘finfluencers’. It launched a consultation paper in this regard, earlier in August this year.

“Platforms like ours (Zerodha) have to do more to help our customers do better with money because today a lot of platforms have taken a stance of just being a platform, and saying that we only enable transactions. But I think the onus is on platforms like ours to help people coming to the markets do better,” Kamath said.

Kamath is also part of the intermediary advisory committee at Sebi.

“I think what India truly needs is a network of registered investment advisors…for a country of 150 crore, we only have around 1,000 advisors. We need advisors who have no commission from the manufacturers to be selling their products. One of the problem statements to solve there is that there’s no predictability in cash flow for advisors,” he added.

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Kamath was speaking at The Economic Times CEO Roundtable in Mumbai, as part of a panel that included top industry leaders such as Tata Sons chairman N Chandrasekaran, Kotak Mahindra Bank founder Uday Kotak, Arundhati Bhattacharya, CEO, Salesforce India, Prabha Narasimhan, CEO of Colgate-Palmolive India, Rishad Premji, chairman of Wipro, Romal Shetty, CEO, Deloitte South Asia, Lakshmi Venu, joint MD of Sundaram Clayton, and Kunal Shah, cofounder, Cred. Kamath also said that while in the past, a lot of retail investors have entered the markets at the top of a bull run, many of them have disappeared at the end of the upcycle. “If you take a longer term view…we don’t want users to come in and then churn…we need to do a lot more to ensure that investors stick in the longer run,” he said.

“One thing that has stuck out in the last 3-4 years is how the market infrastructure has done…people would’ve questioned how we could’ve scaled but thanks to the digital infrastructure…how the exchanges, depositories and the entire ecosystem is set up…(has helped),” he added.

In September, Zerodha lost its pole position of being the largest brokerage firm in the country, losing the title to arch-rival Groww.

According to September data released by National Stock Exchange, Groww had 6.62 million active clients, trumping Zerodha, which had 6.4 million active users for the month.

For fiscal year 2023, Zerodha reported revenue of Rs 6,875 crore and a net profit of Rs 2,900 crore.

Kamath’s comments assume significance at a time when market watchdog Securities and Exchange Board of India (Sebi) has been looking to crack down on unregistered ‘finfluencers’, or financial influencers, in the country.

Further, the regulator is also looking to limit the interactions between regulated entities and these online ‘finfluencers’. It launched a consultation paper in this regard, earlier in August this year.

“Platforms like ours (Zerodha) have to do more to help our customers do better with money because today a lot of platforms have taken a stance of just being a platform, and saying that we only enable transactions. But I think the onus is on platforms like ours to help people coming to the markets do better,” Kamath said.

Kamath is also part of the intermediary advisory committee at Sebi.

“I think what India truly needs is a network of registered investment advisors…for a country of 150 crore, we only have around 1,000 advisors. We need advisors who have no commission from the manufacturers to be selling their products. One of the problem statements to solve there is that there’s no predictability in cash flow for advisors,” he added.

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Kamath was speaking at The Economic Times CEO Roundtable in Mumbai, as part of a panel that included top industry leaders such as Tata Sons chairman N Chandrasekaran, Kotak Mahindra Bank founder Uday Kotak, Arundhati Bhattacharya, CEO, Salesforce India, Prabha Narasimhan, CEO of Colgate-Palmolive India, Rishad Premji, chairman of Wipro, Romal Shetty, CEO, Deloitte South Asia, Lakshmi Venu, joint MD of Sundaram Clayton, and Kunal Shah, cofounder, Cred. Kamath also said that while in the past, a lot of retail investors have entered the markets at the top of a bull run, many of them have disappeared at the end of the upcycle. “If you take a longer term view…we don’t want users to come in and then churn…we need to do a lot more to ensure that investors stick in the longer run,” he said.

“One thing that has stuck out in the last 3-4 years is how the market infrastructure has done…people would’ve questioned how we could’ve scaled but thanks to the digital infrastructure…how the exchanges, depositories and the entire ecosystem is set up…(has helped),” he added.

In September, Zerodha lost its pole position of being the largest brokerage firm in the country, losing the title to arch-rival Groww.

According to September data released by National Stock Exchange, Groww had 6.62 million active clients, trumping Zerodha, which had 6.4 million active users for the month.

For fiscal year 2023, Zerodha reported revenue of Rs 6,875 crore and a net profit of Rs 2,900 crore.