DP Singh, Chief Marketing Officer (CMO), SBI Mutual Fund shares his plans and outlook with Cafemutual
As a Chief Marketing Officer (CMO), what are your key priorities?
In terms of AUM we are in the sixth position and it’s not our natural position as we deserve to be among top three. Hence, our utmost priority is increase market share for which we are trying to provide high quality services to our investorsand also retain their trustby providing them good investment performance. We want to eliminate mis-selling of mutual funds. Not only has it created negative sentiments among people but also it damages the reputation of mutual fund industry.
SBI MF recently tied up with business school XLRI to train IFAs. Tell us more about this initiative. What kind of training are you imparting?
Our motive is to provide professional skills of international standards to the distributors through this initiative. Therefore, our utmost priority is to empower them through world class knowledge.
We are selective whilechoosing distributors for this training programme. We select them on the basis of their commitment and contribution to the industry. They may or may not be empanelled with us.
How are you going about investor awareness programme (IAP)?
We are determined to send the right kind of information to right kind of people. India is a huge country with immense diversity in language and culture; we aim to reach out to these people in their own milieu. IAP is a big opportunity for AMCs to create awareness and we want to utilize this to spread the cause of mutual funds in every nook and corner of the country.
How are you trying to enroll new cadre of distributors?
AMFI has recently come out with District Adoption Programme (DAP) in which we have to adopt seven districts. However, even before AMFI’s initiative, we have started IAP in more than seven districts. I am sure that we will receive good response in the near future from this.
We have already trained more than 1500 people who are bank employees, retired teachers and other qualified professionals under new cadre of distributors. We are now trying to approach more such people through various training programmes for empaneling new cadre of distributors.
How has the concept of fund guru been developed? What are the things would you like to add to this to make it more attractive?
The idea behind ‘Fund Guru’ is to educate people who have never invested in mutual funds. It is a 360 degree campaign which explains basic concept of mutual funds like equity funds, SIP etc. to people in few seconds. The multi-lingual campaign aims to reach out to investors in Tier II, Tier III markets.
Fund Guru is a warm and friendly mascot, who in a simple way, makes people understand mutual funds as an asset class. So, a series of animated edutainment TV commercials on SIP, ELSS, asset allocation etc. has been planned.
We have another series of Fund Guru for distributors in which we tried to explain them financial jargons through short videos of 2 to 3 minutes.
Your AUM in B-15 cities is currently 18.5% which slipped from 20.2% from March quarter. What are the reasons behind this decline? How do you plan to increase your presence in B-15 cities?
These figures don’t reflect the true picture because as of now, we have more than 30% inflows from B-15 cities. We have derived this figure from area pin codes.
We are planning to increase our market share in these areas by opening more braches.
How many distributors are working with SBI MF? How do you plan to enhance your reach?
SBI MF has nearly 26000 distributors out of which around 1700 are active. However, I believe that such figures are deceptive as some distribution houses are bringing good business for us under a single ARN. Let me explain, if NJ India is active with us then around 4500 sub-broker are contributing for SBI MF. . Similarly, our largest distributor, SBI has given us numerous investors through a single ARN.
Which new products are you planning to launch?
As of now, we have no new products in the pipeline. Our focus is on adding more features in our existing products so that we can generate best possible returns for our investors.
Has the recent panic in debt markets spooked retail investors? What is your retail share in the debt funds category? How are you planning to expand the retail reach of your debt funds?
Firstly, I would like to complement the distributor fraternity for maintaining calm during the recent turmoil in the debt market. The industry has witnessed redemption of only 4% to 5% which is slightly more than the normal redemption of 2% to 3%. People kept their faith in mutual funds due to untiring efforts of distributors.
I believe that only distributors can create a major difference in the MF industry as people seek reassurance from a knowledgeable person whom they can trust and only distributors can do that.
Also, I would like to add that mis-selling of debt products has been reduced. Initially, many people had mis-conceptions that debt products were like bank fixed deposits. However, the distributors have educated people about the advantages of debt products over bank FDs.
Currently, SBI MF has 18% retail share in debt products.
