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At the recent Cafemutual Ideas Fest 2025, Prem Khatri, Founder and CEO of Cafemutual shared with us his insights on what makes some MFDs more successful than others.
With his 31 years of experience in the mutual fund industry, Prem talked about the personality traits that make a winning distributor.
Trustworthiness
The foundation of distribution industry is trust. MFDs handle their clients’ hard-earned money, making honesty and integrity essential. Being transparent about risks and providing complete disclosure help build lasting relationship with clients.
Empathy
Empathy is important for understanding the investor’s perspective. The industry veteran compared how an MFD values a Rs. 1 lakh investment of a retail investor. While an MFD may see it as just a commission of Rs. 1,000, for the investor, it represents months of savings and sacrifices. "When you are able to put yourself in the client’s shoes, when you are able to feel the pain, when you are able to feel his hopes, his goals, his aspirations then you have something called empathy," he explained.
Communication
Mutual funds and capital markets are complex topics. MFDs must have strong communication skills to simplify these concepts for investors. Clear and effective communication build confidence and trust.
Patience
Investing is a long-term game. Clients often take time to make investment decisions, which can test an MFD’s patience. However, patience is crucial for both the investor and the distributor, as mutual fund investments require time to yield results. "The only thing that you are rewarded for is being patient," Prem emphasized.
Persuasiveness
Mutual funds are intangible and involve uncertain future benefits. MFDs must be persuasive in encouraging clients to invest and stay invested during market fluctuations. This skill helps clients remain committed to their financial goals. "You can't see them (mutual funds), you can't feel them, you can't touch them. You will need all the persuasiveness to convince clients to think long-term."
Attention to detail
MFDs must focus on the details, especially as regulations continue to evolve. Understanding how the small details of concepts like GST, KYC norms of NRI clients is essential. As regulations continue to evolve, minor errors can cause significant issues for clients in the future.
Resilience
Success in distribution requires resilience. The market goes through ups and downs and many people enter and exit the industry based on market conditions. "We find that in this game, a lot of people come in when the good times are there and exit during the bad times. But the people who have stayed back have all done wonderfully for themselves,” said Prem.
He said "Give me an example of one MFD who has put in hard work and who has been around for 15 years and who has not done well for himself."
Relationship building
This business is not just about transactions but long-term relationships. Proactive communication, regular engagement and maintaining trust with clients over time are key factors in building strong client relationships. "This is not a transaction. This is a very relationship-oriented business."
MFDs looking to build a sustainable and thriving practice can implement these pieces of advice from the Cafemutual Ideas Fest 2025.
To watch the full session, click here.
To explore the ever-evolving world of Passives, join us on May 23 at Cafemutual Passives Conference at Taj Santacruz, Mumbai.
Register now by visiting this link.
To know more about Cafemutual Passives Conference 2025, visit www.cafemutualevents.com.
