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Rajan, you were associated with the mutual fund industry and have seen the industry evolving. Currently, you are with Horton International, a head hunting and talent acquisition company.
The industry aims for a Rs 100 lakh crore AUM by 2028 but does the industry have the right talent to manage this growth?
From just under Rs 50 lakh crore today, we are talking about doubling the AUM in a pretty quick time. This growth will also reflect a huge shift in the number of unique MF investors.
While the industry’s base is no doubt solid, this growth will call for a whole new set of leaders who can
- Drive sales efficiently from smaller towns
- Generate big business from and to overseas markets
- Leverage technology to build substantial direct-to-consumer business
- Help create products that can increase width and depth
- Use/position client service as a differentiator
And more.
However, the industry may not be able to deliver so many leaders and teams below them from within the industry. That means that the industry will have to look at a broader ecosystem and beyond the industry to fill the talent shortage.
Many new players are looking to enter the MF industry. Also, many AMCs have stepped up their efforts and are looking to strengthen their teams. Where will this talent come from? Also, as a result, existing AMCs may see attrition and disparity in income discovery. How can the industry deal with this issue?
Strong growth will definitely disrupt the status quo. The industry must move away from being incestuous and seek talent from outside the immediate industry borders.
Some of the new AMCs are probably doing that already. Poaching from each other is a self-defeating exercise leading to severe dilution in the quality of managers and leaders. It also means AMCs keeping a more open mind and working with HR Consultants (head hunters) who are willing to question the status quo and think outside the box.
Wealth management too has seen fierce competition for talent and a high degree of attrition. What could be the solution for this?
Growth of wealth and investible surpluses among investors means a strong growth in wealth management too.
Here too just looking at other wealth managers as a source of talent may not work well always. While some resources with quality experiences and clients at other such companies may be important, we will serve wealth managers better by
- Finding suitable talent from other sources
- Developing a young team of freshers who can grow into the jobs.
Here again, wealth managers will have to keep an open mind, be somewhat patient and seek help from the right kind of HR consultants to fill the talent gaps.
What are the three things that AMCs and distribution firms should do to retain talent?
Most AMCs are already providing competitive compensation and generous short-term and long-term variable pay while ensuring adequate internal recognition. These are pretty essential for retention but maybe there are a couple of other things they could focus on.
They should evaluate candidates deeply and not be in a rush to hire. Additionally, they should go beyond job requirements and seek a cultural fit between the company and the candidate before bringing them on board. Further, they should provide abundant opportunities for upskilling, reskilling and internal mobility.
A key part of the MF industry is distribution. Despite the spectacular growth in the industry, very few individuals are taking up distribution as a career. What can the industry do to overcome this situation?
Unlike the tied agent model in the insurance industry, most intermediaries in the MF industry sign up with a number of AMCs and distribute a large number of MF products. In this context, the effort to bring more individual distributors will have to be made at the industry level.
AMFI should take the lead here and
- Deploy a significant budget to MFD recruitment communication
- Create a team to support and handhold MFDs through the onboarding process
- Find ways to incentivise freshers through financial incentives, recognition on large platforms etc.
What contribution is Horton International looking to make to the MF industry?
Horton International is happy to serve the MF industry as it seeks to fill the current and future talent gaps, particularly in leadership positions. As a consultant at Horton International focusing on BFSI, I would like to leverage my long-standing association with the MF industry from its nascent stages to add value to the recruitment process with a better definition of the requirement, seek out a wider choice of suitable candidates and help in the deeper evaluation of potential candidates.
