Foundation of Independent Financial Advisors (FIFA) has requested the Chairperson of SEBI Mutual Fund Advisory Committee (MFAC), Arundhati Bhattacharya, to consider inducting a representative of IFA community on its board.
“IFAs channelise household savings into mutual funds; yet there is no representation of the brick-and-mortar distribution community in MFAC,” Dhruv Mehta, Chairman, FIFA, said. The market regulator and MFAC should consider getting representation from the IFA community, he added. Dhruv Mehta was speaking at the fourth annual conference of FIFA held today in Mumbai.
Responding to the request, Arundhati Bhattacharya assured that she would request the market regulator to consider inducting a representative from IFA community. “I cannot promise if it will happen, but surely I will request the market regulator to have representation from IFA community,” she said.
Emphasising the importance of distributors, she said that though urban India has become digitally savvy, Bharat needs IFAs to increase penetration of mutual funds. Many investors need handholding by IFAs for financial decisions—the betterment of both health and wealth need the human touch, she added.
In her speech at the annual conference, the SEBI MFAC Chairperson advised FIFA that it maintain self-discipline among its members. “It is better to be self-regulated and follow best practices,” she commented.
Arundhati had two suggestions for IFAs to grow their business:
Simplicity: No matter how educated your clients are they need simple solutions. Speak to them in their language. Make them understand their short-term and long-term goals instead of talking about the products. Give them solutions rather than products.
Communication: Many people do not understand fancy calculations. Hence it is better to help them with absolute numbers instead of discussing returns in percentage terms. However, make sure the returns expectation you discuss is reasonable.
