With AUM of the mutual fund industry reaching new highs, the industry’s IAP budget too is growing. A rough calculation shows that the industry currently has close to Rs.300 crore to spend on IAPs.
Cafemutual Confluence 2016 conducted a panel discussion with a diverse panel of communication experts – inside and outside experts to give us direction on what needs to be done to increase the footprint of mutual funds through IAPs.
Members of AMFI’s financial literacy committee - Karan Datta, Chief Business Officer, Axis MF, Molly Kapoor, Head - Marketing, Birla Sun Life MF and Sandeep Walunj, CMO, Reliance Nippon Life AMC threw light on what AMFI is planning to do with its IAP corpus while advertising experts Karl Gomes, Chief Fanatic at Fanatics and Sourabh Mishra, former Group Chief Strategy Officer - India Bates CHI & Partners shared their perspective on how to go about creating awareness of mutual funds among masses.
Here are the key highlights of the session:
Karan Datta
- As the industry’s AUM increases, the IAP corpus may go up to at least Rs. 500 crore to Rs.600 crore in a few years. No industry or product has such a huge budget to spend on investor awareness.
- Today, recurring deposits (RDs) and FDs are more popular than SIPs. So the industry should try to replace RDs and FDs with SIPs.
- Despite having 20 years of good track record, no one is talking about the MF industry. Perhaps, the industry has lagged behind in terms of communicating this success story to consumers.
- While communicating with investors, instead of showing graphs and charts, fund houses should talk about the needs and goals of people.
- AMFI is looking to create financial awareness through digital media. There is a possibility that AMFI will receive a lot of queries. Hence, there has to be an infrastructure to address these queries. We can pass on these queries to distributors.
- Mutual fund is not a direct-to-customer product. Our job is to generate leads and distributors job is to onboard them.
- IFAs should try to match up with investors when it comes to leveraging technology. They should adapt to technology at a faster pace.
- AMCs will focus on creating demand and IFAs should be digitally ready to provide services to these investors.
Molly Kapoor
- So far, the industry has done a good job of creating awareness which is evident by the sustained inflows through SIPs. However, we have a long way to go. For instance, even well educated people don’t know what to do with their first salary.
- AMFI will work on creating awareness through print, electronic, digital and ground level activities.
- AMFI’s focus would be on call to action. We will urge people to contact financial advisers to know more about mutual funds.
- So far, we have been communicating in B2B language. Now, the industry should look at ways to talk in customer’s language - C2C.
- Content used in awareness programs should be more appealing and interesting to engage with investors. Use of videos and infographics can make the presentations lively. Also, continuity of communication is the key.
Sandeep Walunj
- The problem is that even if people know about mutual funds, they don’t know the procedure to invest in mutual funds.
- AMFI will create awareness about mutual funds and the responsibility of onboarding investors and educating them about asset allocation and diversification rests on AMCs and distributors.
- A lot of people now use smartphone to consume information. Hence, we are planning to reach out to people through digital platforms.
- Currently, there are 13.5 crore PAN card holders of which about five crore people file their tax returns. We should reach out to these people.
Karl Golmes
- Today, the mutual fund industry is following 1-9-90 strategy where 1% people are trying to create love for the category, 9% people are convinced and are trying it out. However, 90% people don’t care about it. These 90% continue to invest through the traditional route.
- The mutual fund industry should create a community of people having good experience with mutual fund investments. These people can reach out to masses and evangelize the cause of mutual funds in India.
- AMCs and advisers should try to connect with people through social media like Facebook, Twitter and Instagram.
- Digital media provides a good platform to create a community of people who can share positive experiences about mutual fund investments.
- AMCs can create interesting tutorials on mutual funds. One way to do it is to use tools like gamification to engage with people.
Sourabh Mishra
- According to Albert Einstein, insanity is doing the same thing over and over again and expecting different outcomes. The mutual fund industry is doing the same thing for over years and expecting results to be outstanding.
- The MF advertisements come across as they are meant for people who already know about investments. So you need to talk about basic human motivation. You should look at what is happening in the lives of consumers.
- AMCs should talk about something which inspires and moves people.
- IFAs can play an integral role in creating awareness about mutual funds. I think such an awareness has to happen on one-on-one basis. However, IFAs should focus on keeping such conversations very simple.
- The industry should try to focus on building relationship with consumers. Sales will follow once relationship is built.
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