A vision document by Confederation of Indian Industry (CII) notes that the mutual fund industry does not have enough ‘feet on street’ talent i.e. advisors and distributors. And there needs to be more discussion on how the MF industry should create more distribution capacity.
The 14th CII Mutual Fund Summit's whitepaper notes that the ‘Mutual Fund Sahi Hai’ campaign has helped a lot in Investor education. However, the availability of advisors and distributors is a constraint. As a result of which the momentum generated through such awareness campaigns has not been tapped to the full extent.
"To accentuate the success of this campaign, there has to be a push to ‘the feet on the street’. There have to be more advisors for increasing the scale and reach of mutual fund industry," the vision document notes.
"Getting more and more people to join profession of ‘wealth managers’ in mutual fund is important. Bright talent in ‘consumer reach’ and ‘financial literacy’ should be pushed to tailor new campaigns," the document added.
Stressing on the role of MFDs and RIAs further, the white paper notes that though ‘feet on street’ support for executing transactions can be replaced by electronic or digital interventions to full extent, the advisory in ‘feet on street’ cannot be replaced by digital interventions.
Commenting on the present commission structures, the document said that it could also be "helping or hurting. If split down the middle, the right incentive structures are much required." It added that compared to insurance advisory, MF advisory is not readily available.
Further, the whitepaper asks those in the distribution business to be patient for the first few years. It said that the regulators need to allow ‘Advisory & Distribution’ practice in a controlled and regulated manner.
