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What are the key investor trends that you noticed in 2024?
A major trend this year is that investors are fully embracing risk. Many are now actively trading in futures and options. Another shift is the decline of fixed-income investments, which have become somewhat outdated.
Strategies like balanced advantage, equity savings and multi-asset funds are now viewed as solutions to nearly every financial problem despite the lessons from 2001, 2008, and 2013.
A fourth trend is the rise of thematic funds, such as defense funds, which have become increasingly popular. Also, private equity funds and PMS are in demand among wealthy clients.
What skills will be essential for MFDs in 2025?
You have to keep a personal touch with clients to compete with banks and national distributors. The strength of MFDs lies in deep relationships with clients Knowing your clients personally is very essential in this business.
Scaling up technology and widening product offering are also critical to distribution business. You need to be well informed and offer products both physically and digitally.
The last few years have been good for the distribution community largely because of markets. How can distributors sustain this growth and ensure that this momentum remains intact?
First, MFDs need to work harder. Secondly, it’s important to ensure that your clients know what knowledge and expertise you bring to the table. Also, MFDs should focus on adding value to clients' lives by offering multiple services and products.
Direct plan platforms have gained a lot of traction in recent times. In fact, direct plan platforms have opened 40% of SIP accounts. What are you doing to remain relevant for investors?
Direct plans are essentially a starting point but eventually investors seek professional help. These platforms serve a valuable role in educating people who we may not have been able to reach otherwise. However, once an investor becomes more experienced, they move away from direct plans. Direct plans tend to perform well when the market is doing well but when the market downturns, behavioural biases of investors take over and that is where MFDs have a big role to play.
Adding women investors is one of the top priorities of the industry. How are you going about acquiring women clients?
I recently conducted a session in Mumbai that was exclusively attended by women clients and their children. We are eager to engage with women because they tend to refer a lot of new clients, something male clients often don't do. We actively ask for referrals from our women clients. Additionally, we encourage our clients to involve their spouses in financial discussions.
What investor segment do you think is underserved and offers potential for growth?
I believe the segment at the very bottom of the pyramid needs more attention. Even a small amount, like 100 rupees from a large number of people, can grow into a substantial corpus of capital.
The young investor segment is also underserved. They are interested in investing but often don't know what exactly they want to buy.
What technologies do you plan on implementing in the coming year?
We are working on transitioning to AI and Personalized Recommendation Networks (PRN).