Although not all advisors are using the goal based tools launched by fund houses, they say it’s a step in the right direction in improving the standards of financial advisory in India
Mumbai: AMCs are shifting gears from marketing ‘flavour of the season’ products to goal based selling in order to connect with investors and advisors at large.
Franklin Templeton MF launched Family Solutions in March 2011 to help IFAs offer need based solutions. Reliance MF had earlier launched its financial planning tool called Flexible Asset Allocation Tool or FAST in mid 2010 which it plans to aggressively promote now.
So far, distributors did not have a customized tool to advice investors on suitable investment options.
“We saw an opportunity to develop a tool that would empower distributors to offer investors a simplified and customized solution, integrating basic principles of financial planning,” says Sundeep Sikka, CEO, Reliance MF. Sundeep says that FAST’s essence can be summed up in this one liner- ‘Zaroorat jaisi, salah waisi!
FAST offers features like recommending a customised scheme linked to investors goals, income, risk appetite, etc. Reliance MF will issue a customised account statement to its investors which will help them track their investment goals.
Franklin Templeton’s Family Solutions too offers similar features and helps investors track the progress of their investment through a customized account statement issued by the AMC. The tool can be downloaded from its website and is also available with its distributors. Before developing Family Solutions, FT had consulted many advisors for making the platform effective. FT has also been extensively promoting Family Solutions among advisors across India.
Both fund houses allow investments through a single cheque for investing in multiple schemes. These tools have made it convenient for investors and advisor by targeting schemes depending on specific goals. However, one flipside of both these tools is that they only recommend in-house schemes. Both FT’s Family Solution and Reliance MF’s FAST are available free of cost.
“In the new regulatory environment, smaller distributors need the option of a simple solution that they can recommend in a cost effective manner to their large retail client base,” says Harshendu Bindal, President, Franklin Templeton Investments (India).
Harshendu says around 440 distributors are promoting its tool among investors. Since its launch, FT’s site has attracted 1300 unique visitors. FT has adopted a mix of advertising and PR in driving awareness and building credibility among IFAs and investors.
Meanwhile, financial planners have also welcomed these initiatives. “The tools are not comprehensive but it’s a step in the right direction. If more fund houses launch such platforms the quality of financial advisory will improve a lot,” says Sumeet Vaid, Founder/MD, Ffreedom Financial Planners.
