While the mutual fund industry is spending a large sum of money on television and digital platforms to spread awareness, newspapers and distributors remain the major sources of information for mutual fund investors.
In a survey called SEBI Investor Survey (SIS) 2015, the market regulator has found that many investors prefer traditional channels such as newspapers, distributors and SID to gather information about mutual funds.
While 55% of respondents acquire information about mutual funds through newspapers, 47% rely on mutual fund distributors for this information. Another key source of information for the mutual fund investors is friends and family members. SEBI has said that the influence of financial intermediaries and word of mouth marketing are extremely important in the mutual fund market.
Surprisingly, mutual fund investors do not prefer acquiring information through internet and television. SEBI attributed this to a large number of young population in this segment. SEBI said, “It has remained a young person’s domain with 75% of Internet users below the age of 34, 16% of users in the 35-44 years range, and only 9 % users over the age of 45-64. Since Indian investors tend to be older (average age of surveyed investors is 41 years), despite the rising internet penetration in India and the large television audiences in the country, information flow concerning mutual funds and new fund offerings is still controlled by traditional news sources. According to the SIS 2015 data, although 55% of investors acquire information concerning MFs from newspapers, a mere 24 percent use the Internet to receive information while an equal percentage procures this information from television,” said SEBI.
However, SEBI believes that investors will increasingly leverage digital media to access to information about mutual funds in future. “Change is imminent in the industry and ease of use will usher in the direction of online securities markets” said SEBI.
