Hyderabad: A middle class Indian, on an average, loses 30,000-40,000 every year because of bad personal finance products he bought in the past, claims ArthaYantra, an integrated personal financial services company which offers free financial advice online.

The Hyderabad-based company is keen to change the way personal finance is done in this country in tune with the changing social demographics.

Claimed to be the only platform of its kind in the world, the company is funded by US-based WFA Global Investments.

"WFA has taken an equity position. It is not debt," ArthaYantra co-founder and CEO Nitin Vyakaranam told IANS when asked how it plans to pay back the investment firm.

ArthaYantra came into existence in 2007 as a brainchild of two experienced Indian School of Business alumni - Vyakaranam (also founder of India's first online tax filing company - Taxyantra) and Sunil Lingareddy (a serial entrepreneur). It launched the Arthos, a web-based personal finance platform to provide end-to-end advice for individuals in November last year. Earlier, it was offering premium service to customers in high income brackets.

The company uses its proprietary framework, Personal Financial Lifecycle Management (PFLM) and patented processes that help individuals achieve their financial goals. The company claims it has over 1,600 customers.

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With its strong research in behavioural finance, it claims to offer 100,000 financial plans with its portfolio starting for middle-income people who can save 4,000 a month.

"It tells you clearly where you are doing well and where you are not, how you get your future goals to the last degree. It even tells you if you save x amount monthly you will be able to send your child to school next year," Vyakaranam said.

Only four percent of the people are capable of saving for an emergency, the company says, and most people reach only 25 percent of their financial goals.

Unlike banks and the advisory industry, which try to sell their products for the commission they get and without looking at the customers' needs, ArthaYantra claims to be neutral.

"We only advise. We don't even recommend products. We are, in fact, biased towards customers. A lot of times we go to the ombudsman and fight for customers," Vyakaranam said.

The results are evident.

Dipankar, a delivery manager in software services, said in his testimonial on the ArthaYantra website that its financial advice saved him from landing in a mess. "It definitely saved me from landing in a mess that would have otherwise resulted out of lack of long-term planning, the expertise to do so and, more fundamentally, not taking a holistic look at my financial goals, sources, status, priorities," he said.

The company is targeting the 73 million middle class households in India. "The huge middle income population is really disenfranchised. Under Arthos Beta we are now providing them the financial advice free. The customers are free to execute and manage plans on their own or with others," Vyakaranam said.

For customers who need hand-holding, the company has a different package called Arthos Plus, under which a company sends them an executive and charges for this.

Vyakaranam believes many middle class families are not able to achieve their financial goals because of what he calls "non-committed expenses" like those on lifestyle.

"When we put money into an investment, we are not happy because we don't see it physically while if we take the same money and buy jeans or a new phone, we are happy. This is because it is in our hands, no matter if only for half an hour. These are biases every one of us carries. We can beat that only through discipline."

The company is not only planning an expansion to other Indian cities but is also looking at global markets and says it is one of the "few product companies in India that will actually take products from here to the West."

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