The covid-19 pandemic hasn't hit the business of majority of MFDs with 50% of distributors seeing a surge in business in FY 2021. Of the rest 50%, one half saw a decline in business, while the remaining 25% witnessed no significant change, according to a survey done by Cafemutual.
A number of factors worked in favour of MFDs in the last financial year including mark-to-market gains and record-low markets that attracted investments in equity funds. Lockdowns have also ensured that MFDs have time in hand to upgrade their skills and adopt digital processes to enhance reach.
"I must say pandemic hasn't treated us badly. Business went up significantly. Thanks to online platforms, we didn't lose a single working day during the lockdowns. We communicated with clients and a lot of them invested during the March lows. Moreover, we had more time to chase clients as we were not travelling out anywhere," said MFD Babu Krishnamoorthy, who is the President of IFA Galaxy.
A Mumbai MFD requesting anonymity pointed out that even if an MFD did not get new business during lockdown, his business grew significantly due to the rally in the markets.
"Initially it was very difficult to do business. But later it picked up quite well. Investors were skeptical early on. But I kept hammering the point that it was the best time to invest. They responded positively once the market picked up," said Mumbai-based MFD Sadashiv Phene.
The survey shows that the increase in business has not come from existing clients alone. 48% MFDs said they acquired new clients, while 31% reported no change in client base during the last financial year. 21% MFDs said they lost customers during the period.
Lockdowns meant that there was no scope for MFDs to hold physical meetings with clients and prospects. But that didn't affect much, as phone and video calls ensured they didn't lose touch with clients.
Phone calls were the go to option for MFDs. 83% of the respondents said they have used phone calls to interact with clients. Virtual meetings, social media and emails are the next most popular go to options for MFDs.
