HSBC Invest Direct was managing Rs 914 crore in mutual funds.
Following the announcement of the closure of its retail broking and distribution business last month, HSBC Invest Direct will stop its mutual fund distribution business from November 18. The company has sent a letter to all its mutual fund clients to either opt for direct plans or change their distributor.
Cafemutual has a copy of this letter. The company will send a letter to AMCs to disassociate its ARN code 0025.
HSBC Invest Direct was distributing mutual funds, third party PMS, bonds, and as corporate agent of Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd.
HSBC Invest Direct’s revenues from mutual funds has been declining from the last two years. According to AMFI data, the company received Rs. 4.31 crore in FY 2010-11, Rs. 3.24 in FY2011-12 and Rs. 2.52 crore in FY12-13. It manages assets of Rs. 914 crore currently.
Is this an opportunity for IFAs to cater to HSBC Invest Direct’s investors? Not many believe so.
Distributors say that some investors could be referred to HSBC Bank and they say it’s difficult to trace these clients. Some mutual fund distributors who have existing relationship with these clients have an advantage. “We can’t get trail commission if broker code is changed. However, we can at least start a relationship with a client and the wallet share can be increased over a period of time. Clients of HSBC wouldn’t mind shifting to another distributor because they need service. Most of them would be MNI and HNI clients,” said a Mumbai based distributor.
