Listen to this article
The number of retail investors investing in direct plans has risen; in fact, the AUM of direct plan platforms has grown rapidly.
Due to this, many MFDs have seen client attrition. Also, there were conversations around justifying brokerage to investors.
In such a scenario, how can MFDs deal with direct plan platforms who have lot of money to burn in marketing?
Keeping in mind this issue, Cafemutual conducted a webinar on “How to deal with direct plan platforms?”
The webinar hosted Aditya Agarwal, Founder, Wealthy, an online wealth management platform. Aditya shared with us 8 powerful tips to deal with direct plans and overcome client attrition. Let’s look at them:
- MFDs should focus on their value proposition by focusing on these three things:
- Planning and asset allocation
- Product selection
- Management and monitoring
- MFD should communicate these three points clearly and tell their clients how they are investing their time to bring clients’ investment portfolio in the right direction which is not possible through direct plans
- MFDs should shift some of their assets to passives like index funds to reduce cost. Also, they should let go a few clients if they still want to go. In most cases, clients come back over time
- With increase in AUM, the difference between regular and direct also shrinks. MFDs should be prepared with the comparison between regular and direct plan if asked by clients to build trust
- Tangibalise your service by doing regular review meetings. Also, give them regular updates on their investment portfolios and financial goals. Keep sending relevant communication to continue your engagement with them
- Offer multiple products and services to command better share in their wallet
- Be proactive during big market events like fall in markets and pandemic. It adds up tangible value to your clients
- Lastly, the main key highlight was that AI may be an all rounder but it could never replace MFDs. AI can improve and speed up the process but it cannot be better than a person who is doing it personally and making it easy for investors to reach their desired goals
You can watch the complete video by clicking here.
