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As the new CEO, what is your key priority?
My priority is to achieve inclusive growth that is sustainable on a long-term basis.
The Mutual Funds Sahi Hai campaign has helped popularize mutual funds. This is also demonstrated by the month-on-month growing SIP contribution which is now considered as a preferred tool for wealth creation; however, as an industry, we are yet to achieve meaningful scale in smaller cities, towns, and rural areas. The industry’s commitment to investor education and safe-guarding investors’ interest has strengthened the confidence within the investor community. To take it to the next level, we will need more distributors to spread the word/message across smaller locations.
I think the industry can achieve scale by leveraging financial inclusion through Jan Dhan-Aadhaar-Mobile (JAM) trinity like in the banking sector.
You have decades of experience in the banking sector. What are the two things that the MF industry can implement to grow its penetration?
In my experience, three things have worked for banks – tying up with business correspondents to establish the last mile connect, leveraging digitalization and low cost of acquisition.
The MF industry can achieve this by building on the three pillars of digitalisation, distribution & awareness. Efforts are taken by both AMFI and AMCs to conduct regular investor awareness programs across the country to educate prospective investors about mutual funds. SIP is also gaining popularity and has proved to be a first step for many investors to shift from ‘saving’ to ‘investing.
For the industry to grow, we would also need to create a robust distribution network. Our campaign, MFD Karein Shuru is a step towards this direction. Finally, digitalization will help improve efficiency and reach new customers and markets.
During your stint with SBI, you have worked in many small cities and towns. In mutual funds, B30 cities contribute just 18% of the total AUM. In your experience, how can industry add more investors from small cities towns and rural areas?
Creating awareness about mutual funds is the first and foremost step in this direction. AMFI and AMCs are conducting more than 1000 IAP programs per month across the country. This goes a long way in creating interest about mutual funds, disseminating the right information and provides an opportunity to participate in the India story through mutual funds.
Banks have a wider reach and indicators such as credit deposit ratio may be considered to identify pockets of potential investors who already practice financial discipline. We are exploring various possibilities to connect with investors with a habit of regular saving and educate them about systematic investment plan, which encourages regular investing.
You have become CEO when the MF industry has crossed Rs.50 lakh crore milestone. Now, the new target for the MF industry is Rs.100 lakh crore. What are the three key focus areas of AMFI to achieve this target?
The 50 lakh crore milestone is a testament to the trust that investors place in the Indian mutual fund industry. This is a result of the efforts put in by the regulator, AMFI, AMCs and the mf distributors to reach investors across the country. While there’s a new milestone to be achieved, it essentially is a journey to reach more investors. It is important to make investment easier for everyone by means of digitization and increase awareness about the risks and benefits through investor awareness programs. Finally, we also want to have a large number of distributors to cater to the needs of these new investors.
One of the key focus areas was to create distribution force of 5 lakh MFDs to achieve this target. What are the initiatives that AMFI has taken or will take to reach this number?
Given our growth estimates, we will need to increase the number of distributors to service the growing investor base. MFD Karein Shuru campaign is aimed at just that. An increasing number of individuals today aspire to have good earnings and yet be their own boss and even help in serving society at large. Mutual funds distribution is one such career that would precisely help these individuals achieve this aspiration. Over time a combination of legacy business, new flows, and market appreciation could help mutual fund distributors in growing their earnings at an exponential rate. We are also exploring other possibilities like reaching out to the banking sector and micro finance institutes to onboard more distributors.
What are the new initiatives that you are planning for existing distributors?
We are looking at the feasibility of imparting various trainings related to business development, soft skills, product information, etc., with the support of AMCs to existing distributors to hone their skills.
Our ‘MFD Karein Shuru’ campaign works on two objectives, one being a recruitment campaign to attract newer talent to the distribution community and the other being creating a positive image for mf distribution as a career. In our interactions with distributors, we have seen the trend of youngsters not wanting to carry forward the business of MFD because they do not perceive it to be ‘cool enough’. Through our campaign, we want to change that perception.
Today, everyone knows that ‘Mutual funds Sahi Hai’. However, people do not know the next step i.e. how to buy mutual funds. How will AMFI solve this riddle?
On the ‘Mutual Funds Sahi Hai’ website, there are articles, videos, infographics that can help an investor understand ‘how to’ invest in a mutual fund. However, which scheme to invest in, is something that the investors must decide for themselves with the help of mutual fund distributor or a registered investment advisor.
Mutual Funds Sahi Hai website is a treasure chest of content that is very conversational and easy to understand. There is a wide range of articles, videos, infographics and also calculators, all in 9 languages! Mutual fund distributors can leverage this content by sharing it with their prospective clients.
Apart from this, our ‘Mutual Funds Sahi Hai’ (MFSH) posts a lot of informative, fun and quirky content across social media platforms like X (Twitter), Instagram, Facebook, YouTube & LinkedIn from MFSH handle. We would urge the MFDs to follow the MFSH handles and also repost the content from their respective handles. This would help them in reaching out to prospective investors in their circle through digital media, which is most economical media currently available.
