What are your key priorities as CMO at this stage?
We have two key priorities – creating solution-based products for distributors and building digital assets to help distributors onboard clients in a completely paperless and frictionless manner. The second is very important for me as despite so many digital initiatives such as eKYC and mKYC, onboarding a client is still a challenge. We want our distributors to help their prospective clients execute transactions within a minute. This is possible only through technology. The aim is to help expedite onboarding of clients and reduce the cost of acquisition.
You have worked both on the manufacturing and distribution side. How will this help your approach in your current role?
As I have worked on the distribution side, I understand the pain points of distributors. There are many things a manufacturer can do for distributors through technology. One, for example, is to provide a digital onboarding platform for IFAs. Distributors need not fill up multiple forms to execute SWPs or SIPs.
On the product side, manufacturers can come out with need based solutions; we are currently doing this. We are bundling our products so that distributors need not worry about asset allocation and goal planning.
Can you explain a little about these products?
Combo products have been around for many years. We need to understand whether we can get investors to invest in one product that is diversified across a pool of products. Today investors come with different objectives. The way we approach them has evolved. We see customers having clearly defined goals or milestones. We are thinking about customising solutions at the customer level.
Distributors can present these ready-made solutions to their clients. For example, let us say that an investor wants to plan for retirement. This product will have a few funds that will help the investor reach his/her target. The solutions will diversify across asset classes.
Payment wallets such as Paytm and freecharge will soon sell mutual funds. Do you see this taking off in a big way?
There are enough data points to prove that mutual funds are extremely underpenetrated. It is evident from the sheer number of investors. I think more distributors selling mutual funds will benefit investors and the mutual fund industry. For me, distributors are always welcome.
There are case studies that show that such digital only distributors have onboarded several clients through e-KYC. Adding to that, new products like instant redemption from liquid funds will also boost these new players.
However, I do not think that brick-and-mortar distribution is going to disappear India needs all kinds of distributors, be it brick-and-mortar IFAs, or digital distributors such as Paytm.
Robo advisers are seen to be a threat, with the potential to disrupt the traditional advisory/distribution model. How can individual advisors and distributors fend off this challenge?
Even in developed markets, the robo advisory model has not gained the traction that was once widely anticipated. We are not selling car insurance or term insurance here. Mutual funds are a solution-based product that requires understanding customer needs and goals. Investors need handholding by advisors and distributors to invest their hard earned money in mutual funds.
However, robo advisory can be very useful for brick-and-mortar distributors. In my view, distributors can learn from robo advisors on how to simplify processes, do risk profiling, understand customer behaviour and onboard them. I think a hybrid model will work wonders for the industry.
