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Home Integrity

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While it is easy for anyone to say that they are ethical and of high integrity, how do you actually know they practice what they preach? Here are a few examples that demonstrate that we walk the talk.
  1. Unless they are exceptional, we do not recommend New Fund Offerings from mutual funds. NFOs make us substantially more commissions than existing funds. However, we believe that a fund with a track record of high performance is superior to an NFO that is just a “me too” idea.
  2. When selling a Unit Linked Insurance Plan, we try to ensure that for a given level of cover the customer pays the least permissible premium. We earn our revenues on the premiums paid by the customers. Yet, we believe that unsustainably high premiums sold with an expectation of maximizing commissions are very wrong. Insurance products are long term products that the customer must be able to sustain for many years.
  3. Money invested in an insurance policy earns us much more than money invested in a mutual fund. Yet, we will not sell an insurance policy unless there is an explicit and demonstrable need for insurance. Insurance is an expense, not an investment. If our customer does not need insurance, he is better off investing in a mutual fund with much lower charges than a unit linked insurance plan.
  4. Our sales people are incentivized at a flat rate, no matter what mutual fund they recommend. Therefore they will only sell you a mutual fund that is a top ranked fund according to PEAKFILTER, our state-of-the-art fund selection methodology. So a fund will not be proposed to you if it performs badly, even if it offers us substantially higher commissions.
The business case for Integrity

Does such an ethical standard make business sense? We have seen that it does. PeakAlpha has always believed that there are no tradeoffs between looking after your customer’s best interests and maximizing profits in the long run. Building trust takes single-minded perseverance and effort – it is hard to create and easily lost. We build a level of trust and loyalty among our customers that is hard to replicate. It thus forms a competitive barrier that is hard to breach. It gives us several tangible benefits.
  1. Loyal customers refer their friends – this makes our cost of customer acquisition lower
  2. Loyal customers do more business with us – thereby increasing their lifetime value to us
  3. Losing customers due to poor ethical practices is very expensive – these are often the most vocal
  4. Staying one step ahead of the regulators reduces our compliance costs significantly
  5. Employees feel good about not having to compromise on their principles just to hit targets – thereby reducing our recruitment and retention costs
We have consciously created very high expectations among our customers, employees, investors and suppliers. They believe we are a different kind of company and therefore trust us, respect us and choose to associate with us. These expectations reinforce us and help us to stay true to our mission.
 
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