MFDs believe that competition from online distributors like Paytm, Zerodha, ET Money and large distributors like banks and NDs are the biggest challenges for them in business, shows the Cafemutual MFD survey.
The survey covered 1256 financial intermediaries including mutual fund distributors and registered investment advisers across 24 cities. While 861 respondents are from top 30 (T30) cities in the country, 395 intermediaries belong to beyond the top 30 cities (B30) cities. These distributors represent a cross-section of the MF industry.
The survey shows that while 25% MFDs feel that online distributors of direct plans can affect growth of their business, 19% of them believe they feel competition from large distributors is one of the biggest challenges for their business.
Further, 61% MFDs feel that their business have been affected due to emergence of direct plan distributors.
However, majority of distributors i.e. 77% of distributors are confident that they can effectively deal with this challenge through quality of advice and services and relationship with clients.
Action to deal with direct (%)
Other key challenges in the MFD business are – direct plans, market volatility, regulatory changes and knowledgeable investors. Just 9% MFDs feel that there is no challenge in the distribution business.
