As the new MD, what are your key priorities?
Currently, fund houses are a lot more product focused. One of our top priorities is to become much more customer centric. We will focus on understanding how customers think about money, how customers are behaving and engaging with money and so on. And with the help of this, we will be able to come up with better products or models that will support the needs of customers.
Our top priorities also include deepening engagement with distributors and ensuring healthy growth for the company.
What is your roadmap for the next three years?
Our roadmap would be aligned to these three priorities i.e. becoming more customer centric, deepening engagement with distributors and ensuring growth of the company. We will also look to leverage our global expertise to grow in India. I don't think we have maximized this as a company.
Tell us your action plan to deepen engagement with distributors.
In order to grow, it is important that our partners also grow. Therefore, as an AMC we are looking to increasingly use our resources and capabilities to bring more things to the table that can help our partners. This includes product technology support, skill enhancing programs and so on.
For instance, we have a tremendous amount of insight and knowledge on retirement, which by the way, is a big pain point in India right now. We will use this to our advantage and lend support to our partners to prepare them for taking a lead on retirement planning.
What has been the impact of coronavirus pandemic on the MF business?
A pandemic like Covid-19 has caused a huge disruption across industries. The MF industry is no different. It will face difficulties in increasing revenue due to the uncertain economy and market conditions. In such a scenario, AMCs and MFDs have to manage their cost smartly and focus on optimizing cost.
Another impact is the increased level of client engagement by AMCs and especially MFDs. Whenever there was a crisis, distributors usually met clients in person. But they didn't have that leeway this time. Yet, they have managed to adapt to the new normal and engage with clients digitally to establish effective communication.
What are your business plans for the ongoing financial year as we slowly emerge out of lockdown?
We haven't set a definite target in terms of AUM or folios, as things are very dynamic at this point. I think the need of the hour is to be adaptive to new changes, rather than setting targets for the short term.
You have a strong understanding of Indian fintech landscape. How should distributors use it to reduce cost and grow business?
We live in the times of liquid expectations which means expectations of customer experience seep over from one industry to another. As such, customers compare the experience they have had in one sector with others.
Now, step back and see how people are using technology in their day-to-day life. From booking a cab to ordering food online, everything gets executed instantly. But when it comes to the MF industry, the turnaround time is not very impressive. Therefore, MFDs have to bring the best of fintech models and add with it their personal advice to grow their business and reduce costs at the same time.
As part of MintZip, you have worked in the robo advisory space. Share with us some of the learnings from that experience.
I had a great chance to learn the pain points of investors. And one of the learnings is that investors want finance to be simple. Many of them opted for a career that has nothing to do with math. But here we are asking them to do the complicated mathematics again!
Another learning is that the algorithm used in robo advisory space can offer only execution. But for that to happen, one needs to evaluate their financial goals successfully. And even if there is a way to evaluate needs of investors, they are not willing to give their financial details because they don't feel safe and secure about the entire process.
Many in the industry feel that in the aftermath of the lockdown, the MF industry's priority should be to cater to a conservative investor mindset. What are your views on this?
Yes, this pandemic has brought the focus back on the importance of savings.
Now, with the heightened market volatility, investors will tilt towards investment products that can protect them from the downside risk. Less risky and high quality investment products will be preferred over return generating volatile products. And this is where the challenge for the MF industry comes in. We have to educate investors that mutual funds do offer safe and sound products across different time frames depending on the risk appetite of investors.
How can distributors keep themselves motivated during tough times like this?
Given the challenging times, it is natural for any distributor to feel a bit discouraged and disheartened. They must be asking themselves the question why they opted for this profession in the first place! And I think this is a good time to look for an answer to this question, because then only you will be able to realise that this is just a bump in the road. And you have overcome several such obstacles in the past.
So the mantra to remain motivated will be to focus on the long term while being adaptive and agile to survive in the short term. And if you are able to do that you will come out with probably a lot more loyal customers, positive word of mouth and a lot more assets.
