In an interview, Vishranth Suresh, Co-Founder and CEO, AssetPlus shares with us the journey of AssetPlus, highlights major achievements of the company and tell us how his company has been adding value to the life of MFDs.
AssetPlus initially entered the distribution business but eventually shifted its focus to a B2B model, offering comprehensive solutions to individual Mutual Fund Distributors (MFDs). What was the rationale behind this transition?
I began my journey in the distribution business driven by a passion for financial markets and a desire to help friends and family with investment advice. However, as I delved deeper into the field, it became evident that the broader ecosystem faced significant challenges. India needed a greater number of Mutual Fund Distributors (MFDs) to effectively cater to the diverse needs of investors.
A strong penetration of mutual funds across India could only be achieved with the personalized guidance of human advisors—MFDs. Recognizing this, AssetPlus decided to transition its focus towards a B2B model, offering comprehensive solutions designed specifically for MFDs.
What was the rationale behind sub-broking business?
The transition towards trail commission in the industry required a significant change in the business model of Mutual Fund Distributors (MFDs). Previously, an MFD could thrive with a client base of 50-100. However, the new model requires MFDs to be more efficient, focusing their efforts on client acquisition and management.
One of the main challenges found was that the existing software didn't fully meet the needs of MFDs. As operations became more complex, many Asset Management Companies (AMCs) reduced their physical offices. This made things harder for MFDs, who had to handle more tasks with fewer resources.
Additionally, regulatory compliance checks became more stringent, adding another layer of responsibility for MFDs. Beyond compliance, MFDs also needed extensive support in business development, training, and marketing to remain competitive and grow their client base.
To provide a comprehensive solution across these functions, AssetPlus identified the sub-broking model as the optimal approach. This model allows us to take on the operational coordination responsibilities between AMCs, Registrar and Transfer Agents (RTAs), and Know Your Customer Registration Agencies (KRAs), thereby alleviating the operational load from MFDs.
How has AssetPlus’s journey been so far?
Since our B2B platform's launch in January 2020, AssetPlus has rapidly grown to become one of the largest digital platforms for Mutual Fund Distributors (MFDs). Today, we proudly serve over 10,000+ empaneled MFDs.
On the financial front, we manage Mutual Fund Assets Under Management (AUM) close to 3000+ Crores, with a robust monthly Systematic Investment Plan (SIP) book of 50+ Crores.
We are privileged to count industry leaders like Mr. Bhupinder Singh (Founder, InCred) and Mr. Nithin Kamath (Founder, Zerodha) among our shareholders, who have supported and guided us throughout our journey.
What do you consider your biggest achievement?
One of our biggest achievements is building a unique digital platform, used by our MFD partners today. Although officially launched in 2020, the platform's development extended over 7 years. Today, I believe it stands as one of the most robust and comprehensive platforms available to MFDs in India.
Why do you think distributors should join a platform like AssetPlus?
At AssetPlus, we recognize that a distributor's role goes beyond transactions; providing service and guidance are both equally essential. We empower MFDs with TTT—Tools, Training, and Technology—critical elements for attracting clients and delivering sustained, high-quality service.
In India, MFDs spend a significant amount of time on operations compared to their global counterparts. Coordinating with over 40 AMCs, 5 KRAs, and various Insurance/FD providers is very inconvenient, involving tasks like managing transaction failures and multiple reconciliations. An MFD using AssetPlus experiences much higher productivity, as we take up the primary responsibility for overcoming these challenges.
How is AssetPlus different from other platforms?
AssetPlus stands out in mutual fund distribution by prioritizing cost-efficiency and exceptional support for MFDs and their clients. Our platform provides seamless client onboarding, advanced transaction execution, comprehensive operational support available seven days a week, extensive training programs, top-tier research and marketing materials, and brand-building opportunities at no additional cost. Additionally, we also offer a diverse range of products including Life/Health insurance, Corporate FDs, Sovereign Gold Bonds (SGBs), National Pension Scheme (NPS), Portfolio Management Services (PMS), enabling MFDs to address all client needs through a single platform.
What’s in store for new and existing MFDs with a few crores in AUM?
AssetPlus provides customised training and support to help MFDs with a few crores in AUM scale their businesses effectively. We offer solutions and guidance on acquiring new customers, addressing existing customer queries, and recommending suitable funds, empowering MFDs to grow and succeed.
AssetPlus has made significant progress in a short period. What are the factors that have helped you win over MFDs?
I believe there are fundamentally two aspects where AssetPlus excels - "Conviction in MFDs" and "Credibility."
When I graduated from IIT Madras and chose to become an MFD in 2016, my decision was met with disbelief from family and friends. Despite this, we applied for an ARN the day after Awanish (my co-founder) graduated. In 2019, amidst the rise of DIY platforms and Direct plans, while many peers shifted focus, we doubled down on our belief in the necessity of MFDs. AssetPlus was among the very few firms to heavily invest in MFDs during challenging times.
Through our journey, despite personal challenges, our conviction in MFDs remained steadfast.
Additionally, having esteemed shareholders like Mr. Nithin Kamath, who advocate for client-centric practices, enhances AssetPlus's credibility and vision. We view AssetPlus not just as a business venture but as a means to enhance the financial ecosystem and contribute to the nation. Our motto, "Think MFD, Breathe MFD, Live MFD," underscores our dedication to the mutual fund distribution community.
Partnering with a platform for backend services makes sense for anyone starting their distribution business, but do they really need to continue sharing their revenue with platforms once they get established and can afford to have staff?
Revenue sharing with traditional platforms versus a low-cost platform like AssetPlus has significant differences. Our asset-light, high-scale business model leverages technology to serve a large number of MFDs, keeping costs minimal and margins competitive.
By aggregating transaction volumes, we negotiate favorable terms with product manufacturers, potentially increasing earnings for many MFDs on AssetPlus. Even for MFDs with a sizable scale, the opportunity cost of managing operations, compliance, software expenses, and staffing significantly exceeds the minimal margin difference of working with AssetPlus. Therefore, AssetPlus remains a compelling long-term partner for both new and seasoned MFDs.
Some MFDs are open to sharing revenue but fear poaching of clients and a loss of individual brand identity. Are these fears justified?
MFDs partnering with AssetPlus need not worry about these issues.
We prioritize complete confidentiality of client data and adhere strictly to standard confidentiality norms as a digital platform, including restricting data access to team members.
Since we operate without physical presence, our business model prohibits our staff from visiting clients with partners. Moreover, we actively encourage and assist MFDs in building their own brand identities.
Personally, I strongly believe that empowering MFDs to operate efficiently is essential for significantly increasing Mutual Fund penetration in India and ensuring long-term wealth creation for clients. MFDs partnering with AssetPlus can trust us as a committed long-term partner dedicated to their success and well-being.
ARN registrations have picked up after two consecutive years of decline due to the ban on upfront commissions and COVID-19. Why do you think people are finding MF distribution attractive again?
There's a shift towards viewing MF distribution as a service rather than just a business. The success of current MFDs inspires others to enter the field, driven by the opportunity to assist clients in achieving financial goals while forging prosperous careers. I am confident that we will exceed 500,000 MFDs by the end of this decade.
In conclusion, what can we expect from AssetPlus moving forward?
Moving forward, we will focus on strengthening our tech and automation capabilities, integrating Term and Health insurance into the AssetPlus ecosystem, and providing extensive sales-enablement support for our partners. As we expand, our commitment remains steadfast in empowering MFDs to excel in a dynamic financial landscape, equipped with the essential tools, training, and technology for their success.
