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Experts say that MFDs should have a tie up for offering multiple services if they do not have expertise. However, how can MFDs trust other entities/platforms? What are the three things that MFDs should look at before entering into a business relationship with other professionals?
Today, it's imperative to deepen client relationships to grow business with each client. An MFD should focus on providing services for 50 to 70% of clients’ total savings. This is where a multi-product platform helps.
However, MFDs should check for a few things before opting for such a platform.
Check if the platform maps to your account the revenue for any DIY transaction that a client does through the platform/application. This ensures you do not lose a client’s wallet share and the platform contributes to business growth.
Also, look out for the platform’s reporting capabilities that facilitate tracking not only the distribution business but also investment portfolios. Ease of transaction execution, primarily through digital means is another important consideration.
Wealthy is one such multi-product platform that provides a comprehensive product range and reduces the need to approach different platforms for different products. In addition to providing details of DIY transactions, relevant reports and digital ease, it offers many other features to partner with MFDs in their growth.
How does Wealthy support distributors to set up a multi-product business model? Also, could you throw some light on the associated fees?
MFDs earning their entire income from mutual fund distribution are dependent on a single product/ line of business. They should de-risk by diversifying their product range. Through product diversification, MFDs can minimize the impact of regulatory or market-led changes on the distribution business.
Apart from mutual funds, Wealthy's platform enables access to a wide range of financial products like fixed deposits, life and health Insurance, bonds, AIFs, PMS, depository and stock broking accounts, etc. Notably, we share majority of the intermediation income that Wealthy receives on these products with our partners at the industry’s best rates.
Apart from mutual funds, what are the three products that MFDs should include in their product basket? And why?
MFDs can look at life and health insurance, fixed income products and depository and broking accounts.
The recent covid-19 pandemic painfully reinforced that an integral part of an individual's financial plan should include life and health insurance cover. It is important to have these covers in place to provide an income replacement and to meet expenses towards an illness.
Fixed income products like corporate fixed deposits and bonds with good credit ratings are also essential. This is especially true for clients who need regular and predictable income or have short term goals for which equity-oriented investments are not feasible.
Talking about the third product, depository and broking accounts help to build a well-rounded portfolio through shares, IPOs and bonds.
There are other National Distributors (NDs) in the MF industry. How do you position Wealthy differently from them?
We focus on providing ease of doing business to our Wealth Partners.
A seamless digital onboarding of partners and their clients and a large product breadth including stock broking help us be a one-stop shop solution for MFDs.
Also, our partners enjoy an independent relationship with their clients without any interference from Wealthy. We do not reach out to any of our partners' clients without their knowledge and/or consent.
Notably, if a partner's client chooses to execute a DIY transaction, that transaction too gets mapped to the respective partner. In this way, we ensure our partners do not lose revenue and can place full trust in the Wealthy platform.
A partnership with an ND may overshadow an MFD's individual brand. What are your thoughts on this?
For us, an MFD's relationship with his clients is what matters the most. After all, it is an MFD who guides clients across various investment avenues. For clients, an MFD remains and will remain the primary brand.
Using Wealthy's platform allows MFDs to be business-ready on day zero without making huge capital investments as otherwise needed to buy software, rent office space, etc.
Wealthy is a platform that you can partner with to manage client relationships and create a smooth investing experience. Also, it saves you from negotiating multiple commercial contracts with service providers across 40+ MFs, 10+ insurance companies, and several FD providers.
Most importantly, the client-facing application and any transaction proposal that partners share capture the partner’s name. This ensures each transaction executed on Wealthy's platform retains the MFD’s identity.
What is the enrolment process and what revenue stream can MFDs expect from this partnership?
MFDs retain the majority of the revenue generated from the financial products that their clients purchase through Wealthy. This can be in the form of trail income, insurance commissions etc.
An MFD with 100 clients doing a Rs 10,000 SIP can earn up to Rs 10 lakh a year. To this, if you add the cross-sell options that Wealthy provides, the earnings can go up manifold. Hence, the opportunities are seemingly endless.
