MFDs need to adapt, evolve and create a unified voice to benefit from the ever-growing mutual fund business, said Nilesh Shah, MD, Kotak Mutual Fund.
"Indians are good savers. As economy grows, savings grow and hence the distribution business will grow. All you need to do is adapt, evolve and create a one common voice to ensure that no adverse rules and regulations come into force," he said this at the Cafemutual Ideas Fest (CIF) 2022.
'Adapt and evolve'
MFDs will have to choose between two options — focusing on a niche segment or joining hands with other MFDs — to survive and grow as distributors in the future, Shah said.
Shah believes that the bottom of the pyramid investors will continue to migrate towards online direct mutual fund platforms but all other investors (HNIs and those in the middle of the pyramid) will stay with MFDs and RIAs as they will need human touch.
"The lower quartile investors will keep moving to platforms while the top end investors like HNIs and super HNIs will require personal touch along with digital convenience," he said.
"Investors who are above the lower quartile but below HNIs will also value advice and present business opportunity for MFDs," he added.
'Room to diversify offerings'
In future, MFDs will not only sell mutual funds but also other financial products including those on the liability side, Shah said. "They will also provide accounting, taxation and other services. This will help build a better connection with clients," he said.
The importance of one voice
The distributor community needs to have one strong voice, said Shah. "Today the voice is segmented. A strong voice can make a huge difference in shaping up of rules and regulations in the favour of MFDs," the MD of Kotak MF said.
