PPFAS Counters Mis-selling With a Client-First Approach

Parag Parikh Financial Advisory Services (PPFAS) Ltd's flagship flexi-cap scheme has a cult following in the mutual fund space. After all, it has generated a compound annual growth rate (CAGR) of 18% since its launch in 2013.

- Sashind Ningthoukhongjam & Neil Borate

Parag Parikh Financial Advisory Services (PPFAS) Ltd's flagship flexi-cap scheme has a cult following in the mutual fund space. After all, it has generated a compound annual growth rate (CAGR) of 18% since its launch in 2013. However, at its annual unit holders' meeting in 2024, one of its unit-holders had an interesting story.

Financial advisors sold her an unlisted debenture, promising good returns. When it came time for her to pay for her daughter's fee, she found that the investment was illiquid. Later, she told the PPFAS team that she had no other option but to sell units in the PPFAS flexi-cap scheme to pay for her daughter's college.

Khushboo Joshi, chief wealth officer of PPFAS Wealth, told Mint that over the years, they have encountered many cases of misselling from their mutual fund clients. Now, they want to take a step further to start a wealth management division to solve these issues. The game plan is to replicate the core philosophy that has driven the fund management business over decades.

"While clients were seeking financial doctors, they came across financial chemists who sought to cure by providing whichever medicines they had in stock, rather than the medicine best suited for the client," according to PPFAS Wealth on its website. "PPFAS Wealth aims to be that financial doctor who would prescribe the solution most suitable to the client." Edited excerpts: