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RK Jha, Managing Director and CEO of LIC Mutual Fund, speaking at the Cafemutual Ideas Fest 2025 (CIF25), explained the role of mutual fund distributors in wealth creation of investors and highlighted their role in the expansion of the mutual fund industry.
Here are the key highlights of this session:
MFDs Help Investors Stay Committed
Jha said that the difference in long-term SIP commitment between direct investors and those guided by MFDs is longevity. Only 5% of investors who invest directly keep their SIP AUM for five years. But in regular plans where MFDs guide investors, the continuation rate is 15%. He said, “This is your power”, explaining MFDs play a big role in keeping investors disciplined for the long term.
Reassure Clients
MFDs should stay in touch with clients, especially during market ups and downs. This makes sure that investors remain invested to achieve their financial goals.
He gave the example of the recent tariff talks concerning the President of the United States Donald Trump, saying that it is showmanship, and that the effects are miniscule. Jha explained that on a totality basis, India’s tariff rate is 7.7%, while America is 2.8%, a difference of about 4.9%. He said that MFDs should explain this to clients to reassure them.
54% of the total SIP inflows comes from B30
In AUM by region, big cities like Mumbai and Delhi have the highest AUM. Mumbai has the largest AUM at 27.2%, followed by Delhi at 12.2%. But B30 cities are also seeing good growth. About 54% of all SIPs come from these smaller cities, showing that more people outside big metros are investing.
This means there is a big opportunity for mutual fund penetration. As India's middle class grows, more people will invest in mutual funds.
To watch the full session, click here.
