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  • MF News ‘Flipkart to sell mutual funds, insurance’

    ‘Flipkart to sell mutual funds, insurance’

    Amazon already owns a stake in a robo advisory platform, BankBazaar.
    Nishant Patnaik Jun 3, 2017

    The competition in the online mutual fund distribution space is heating up.

    India’s largest e-commerce giant Flipkart is likely to start distribution of financial products like mutual funds and insurance, says a report in ‘The Economic Times’.

    The report says that the company has already started offering loans to sellers in partnerships with banks and NBFCs. “Now, apart from loans, Flipkart is also looking at mutual funds and insurance products.” To start with, Flipkart would target its seller to distribute financial products.

    Chinese e-commerce giant Alibaba followed a similar strategy where they  deployed the surplus funds of their sellers in liquid funds through their wealth advisory arm Ant Financials (then Alipay), which proved to be a big success. Later, the company expanded their distribution business by offering other mutual fund schemes and financial products.

    Other e-commerce giants like Amazon already owns stake in online distribution and robo advisory firm, BankBazaar. Similarly, Snapdeal had also invested in financial services startup Rupeepower, which help people compare credit cards and loans across banks.

    Two years back, SEBI had constituted a committee headed by Nandan Nilekani to recommend measures to reduce cost structure of mutual funds. The committee had recommended SEBI to introduce a new distribution channel through e-commerce websites like FlipKart, Amazon and Snapdeal.

    Also, the market regulator has allowed investors can invest up to Rs 50,000 per financial year per mutual fund using one time password (OTP) through eKYC. SEBI is likely to approach the ministry of finance requesting allowing bank KYC and Aadhar as valid KYC and IPV to invest in mutual funds. If implemented, it will help distributors especially online players to on board clients on a real time basis.

    In addition, payment banks like Airtel Payment bank and Paytm have expressed their interests to launch financial distribution services. Recently, SEBI has allowed fund houses to facilitate transaction in mutual funds of up to Rs50,000 through e-wallets/digital wallets.

    G Pradeepkumar, CEO, Union Mutual Fund and Vice Chairman AMFI believes that e-commerce players like Flipkart may not create significant impact on the industry. “Currently there are many online distribution platform in India and we are yet to see traction in this segment.” He believes that e-commerce distribution will not hinder the growth of IFAs as people need handholding for investing money. “Today, many people do not know that they have to invest in mutual funds to grow wealth. We have to nudge them to invest. So we will need advisers to onboard new investors,” added Kumar.

    The online MF distribution space is already getting crowded with many players lookng to cash in on the growing e-commerce trend.

    Have a query or a doubt?
    Need a clarification or more information on an issue?
    Cafemutual welcomes all mutual fund and insurance related questions. So write in to us at newsdesk@cafemutual.com

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    10 Comments
    Prashant · 6 years ago `
    This is absolutely wrong assessment by Mr.pradeepkumar since after launching direct plans many people even the once who Thought and peiple who did not thought that they know everything about mutual funds have started investing in those plans. For IFAs to sell mf products we need to appear for NISM test and now forcefully beecome RIAs. What about fund houses, web aggregators and e-commerce people? This is just to nenefit the mf industry at the cost of investors. AMFI is ready to go to any extent to gather money at the cost of investors and distributors or else why would they approach SEBI now? When it is and was very tedious for all the distributors to fulll the kyc forms 4 times of the same people, give FATCA and go through so much trouble but this was never been thought of but now when these companies are entering they are going to make it easy for them. It seems that distributors are the only ones who SEBI and AMFI wants to put out of the business and wants to bring these compabies who can earn much higher commissions whereas we are left at the mercy of thsse bloody corporates.

    One more misselling door opened for investors. I urge all the distributors to boycott theae moves. And all the investors to not buy any such product from these companies.
    RAMESHWAR · 6 years ago `
    all distributorshould unite together .if distributor of individual category want any legal support ,i will be happy to provide legal help free of charge for the benefit of investors &individual distributorYours faithfully,
    R sugandhi PhD LLM
    > Head ,deptt of Research <innovation ,Conference ,Legal
    > Laxmipati institution of science & technology
    > National awarded writer &ex Manager MP BIOTECH
    > Amjhara Road, Khajuri Kalan, RAISEN ROAD BHOPAL[M.P]
    > , 0755- 2751802, 2751803,, 4074421.8989545727,


    Karan · 6 years ago `
    Hope their sellers will clear the NISM exam before selling MF.
    Nagaraja K · 6 years ago `
    This move is also great step to garner more funds. Nothing wrong. E-Commerce has grown and I think they will do justice to mutual funds too. I don't think that great knowledge is required to sell financial products. One must know how to trade "skills". In insurance it is happening. The main goal of any financial organisation is to earn money and find ways to get it through any means. What is wrong? Sagar me paani kahin se be bahe kya farak padta hai. Yehi to duniya ki reet hai. I welcome the move.
    KUNDA KRISHNA · 6 years ago `
    Then why three years ARN?
    Tansu Investment · 6 years ago `
    Again a wrong step by Sebi. It seems that IFA are the only ones who SEBI and AMFI wants to put out from the business. Ifa and his family is suffered by this step.
    Dhanashri · 6 years ago `
    Again a wrong step by Sebi. It seems that IFA are the only ones who SEBI and AMFI wants to put out from the business. Ifa and his family is suffered by this step.
    Martin kamdar · 6 years ago `
    I think MF is not a single transaction business, like the other products they sell online. Mutual fund business requires a long tie up business. You have to maintain a repo with all AMCs & work for clients.
    Kartik Kamdar · 6 years ago
    I think MF is not a single transaction business, like the other products they sell online. Mutual fund business requires a long tie up business. You have to maintain a repo with all AMCs & work for clients.
    Reply
    Prithvi Parmar · 6 years ago `
    Firstly, India's majority investors are traditional investors. People even after getting conviction and are already existing investors are not putting all their eggs in one basket. There are majority investors still believing in FDs. Real Estate. It is all the question of Trust. Buying products on Flipkart is still not trustable. Buying MFs is completely out of the sky picture. Without having knowledge of Asset Allocation, I don't think any investor is gonna log in E-commerce and buy a Fund for which they do not get any product. And the growth of Indian MF AUM has drastically increased in last couple of years, SEBI is trying to be very greedy with the income generation of distribution.
    Some things cannot be regulated online. Investors will need advisors. Keep up all your good work distributors. All hail you and there will always be our need. :)
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