It has been over 6 months since you joined Axis MF, what are your three key priorities for the fund house?
Axis Mutual Fund is a great brand to work with! After joining here, I have identified some opportunities for the fund house, especially in fixed income category. Our fund house is yet to gain traction in the fixed income space despite the fact that we have a well-established fund management team that has demonstrated a strong performance, repeatedly.
Our fixed income fund managers – R Siva Kumar and Devang Shah have put very strong processes in place, due to which we moved to AAA ratings much ahead of time. This is evident from the fact that we do not have exposure to some of the bonds that were in the news recently.
We are already very strong on the equity side and will continue to focus on delivering performance to get inflows.
Lastly, we will strengthen our digital offerings to make the investing experience simpler and easier for our partners.
Summing up, my key priorities are building fixed income assets, delivering strong performance, and strengthening our digital offerings.
Axis MF is one of the fastest growing fund houses in the MF industry. How will you ensure that the growth momentum of the fund house remains intact?
As I have mentioned, we have started focusing on the fixed income space. We strongly believe that distributors should look beyond equity funds to take their business to the next level. The recent market correction has affected many distributors – their income declined by 30%. But if they would have had exposure to fixed income assets – they could have cushioned their income from such a fall.
A major portion of your equity assets (48%) comes from banking channel. How will you increase your reliance on non-associate distributors?
We are an 11-year-old company. While it is true that our reliance was significant on Axis Bank in the first 5 years, this has gradually declined over the last 6 years. In fact, our dependence on banking partner is less than a few other fund houses having banking promoters.
Today, we work with many wealth managers, individual MFDs, and banks. In fact, over the last one year, the total number of distributors actively working with us has gone up from 7,000 to 14,000.
What has been the impact of coronavirus pandemic on the MF business?
The first 15 days were very difficult for all of us. However, over the last couple of months, we have become comfortable working from home and have witnessed higher productivity. But I am missing social interaction with colleagues and partners over a cup of tea. Let us not forget that the MF business relies heavily on physical interaction to get business. This will not change overnight. Many people still prefer physical meetings and we should respect this.
Overall, the MF business is more resilient compared to most other businesses and people associated with mutual funds should not worry about their future growth. The MF industry would continue to get new business as many people have realized the importance of financial savings and investments.
What support has your fund house extended to distributors to deal with covid-19 outbreak?
We have been conducting training sessions to keep them updated with the latest developments and enhance their knowledge. The best part about these training sessions is that we do not talk about jargon like yield curve; instead, we give them practical business tips. We have also done a couple of sessions to motivate them.
Also, we have introduced new features in our b2b app that can enable distributors to segment their clients and plan their engagement accordingly.
Another thing that we do is to pay trail commission within the first 10 days of the month. There has been no delay on this front. We give brokerage to 14,000 distributors every month.
Share with us three tips for distributors to grow business during the covid-19 pandemic.
Firstly, individual MFDs should segregate their clients based on factors like ticket size, longevity and so on.
Secondly, individual MFDs should put in place some processes to communicate with clients regularly. However, keep in mind your clients’ preference first and keep reviewing it regularly.
Finally, MFDs should create an emergency corpus for themselves having 6 to 12 months of working capital. Such a corpus can help distributors in difficult times like these.
Since implementation of all trail model, there is a substantial decline in the number of new distributors. What needs to be done to attract more distributors to the industry?
I prefer quality over quantity. Industry needs an army of serious mutual fund distributors to achieve Rs.100 lakh crore AUM. These serious distributors have a long-term focus and the only thing they care about is the best interests of their clients. These distributors have been setting great examples by helping clients achieve their financial goals.
I must say that while banning of upfront commission has affected the MFD community; it has wiped off non-serious players.
