Tavaga launches algo trading app for retail segment

Mumbai-based Tavaga, a robo advisory firm, is looking to disrupt the wealth advisory industry by tapping into the category of retail investors who do not have access to professional wealth and fund managers.

Using advanced algorithms for asset allocation, Tavaga’s free application gives retail investors access to the same technology, processes, advice and investment products used by professional investment funds at a much lower cost.

Tavaga, currently backed by Bengaluru-based Tracxn Labs, has launched their innovative robo advisory platform this month.

Nitin Mathur, CEO of Tavaga said, “Tavaga’s service is an alternative to mutual funds, mutual fund aggregation start-ups and traditional savings instruments. The investments are done through the cost-effective ETFs, saving huge intermediary costs for the retail investors.”

To facilitate customer experience, Tavaga has partnered with Edelweiss, one of the leading brokerages in India. Tavaga is betting on its mobile application to expand into the smaller markets, targeting customers in the 25-45 age group with liquid savings of ₹10-75 lakh.

Boston Consulting Group (BCG) says there is an estimated 60-80 lakh households fall under the above mentioned category and according to a Standard & Poor’s survey, nearly 76 per cent of the adult population in India does not understand basic financial concepts and as a result, many are being taken for a ride. To further compound this problem, unaware investors are paying huge commissions to financial advisers and high management fees to mutual fund managers. There’s also too much confusion over picking the right funds, the survey said.

Mathur added that while the rich or the HNIs have access to professional wealth management services and invest across MFs, VC funds, direct stock and offshore investments, the middle class mostly relies on independent financial advisers and retail bank advisers for money management needs. However, the survivors have little or no access to standardised financial instruments and end up investing into chit funds and other Ponzi schemes, he said. The investment management space for retail investors is a crowded market in India with players such as My Universe, Scripbox, Funds India and Arthayantra, among a dozen others, who earn revenue through either product fee, commission, brokerage or advisory fee.