What is the rationale behind launching Wealth Beats? How did the idea come about? How can IFAs benefit from this initiative?
The IFA and distribution community is among the key drivers of Mutual Fund penetration in India. Within this segment there is great diversity. There are advisors with different backgrounds, from cities with varying levels of affluence, using different models, managing different investor profiles, to name a few. The one thing that unites them however is their passion for the mutual fund business, and their commitment to the investor.
The idea behind Wealth Beats was to celebrate this diversity, by bringing to the fore stories of advisors from all across the country, who through dedication and hard work, created their own formula for success. How these IFAs approach their business, serve customers, grow their AUM and customer base can be inspirational for so many others, and especially for young, upcoming IFAs. Wealth Beats is therefore a platform of learning, and inspiration from IFA-to-IFA, from peer-to-peer, so together the members of this community can inspire each other to take their own business, and the Mutual Industry to even greater heights.
Apart from Wealth Beats, what new initiatives have you undertaken for your distribution partners?
As part of our vision is to be a true partner to the IFA community, we have a host of Communication, Engagement, and Service initiatives exclusively for IFAs, and distributors. This also includes our Training and Development Programmes to hone advisory skills of IFAs, executed through diverse modules such as Certified Financial Goal Planner (CFGP) Certification, Big Ideas for B15 markets, to name a few. .
Apart from this, we have been offering Privilege Club membership from over five years now. A lot of distributors have benefitted from this initiative. Now, we are looking to expand the number of products offered in the Golden Age Plan (a retirement benefit program for IFAs where BSLMF also contributes towards the IFA’s retirement corpus). IFAs do not get any formal retirement corpus. They need to plan for their retirement from their commission income, and our Golden Age Plan offers the right solution for them.
Many IFAs seem to be perturbed with the regulatory headwinds. What would be your advice to them?
I believe that change is the only constant. We need to adapt to changes especially when the opportunity is big. If the opportunities are endless, IFAs should not worry about short term hurdles.
To give you an example, the share of mutual funds as a percentage of bank FDs is the United States is 110%. If we compare this with India, MFs penetration is 14% of the total bank FDs. The scope here is tremendous. India’s economy, income and population are going to increase manifold from here. So to cater to this huge population and channelize savings in mutual funds, there will be a greater demand for IFAs.
When I took charge as the CEO of BSLAMC in 2009, entry loads were abolished. Everyone thought that this will be a major setback for the industry. But if you look at the industry since 2009, it has grown rapidly. MF assets have increased from Rs. 4.17 lakh crore in March 2009 to Rs. 14.21 lakh crore as on April 2016.
So my advice to IFAs would be that they should concentrate on building their business by acquiring more clients and increasing volumes. They should operate in an organized manner with a clear business plan and strategy to execute it. For instance, they need to set target for themselves which challenges them. They can set targets like ‘I will get 1 new customer every day’, or ‘I will get 5 SIPs a day’. For every Rupee of equity, can they sell Rs. 5 of debt? Thus, targets help people work towards a goal. If they set targets, they can measure their success.
IFAs also need to adopt technology to scale up. This does not mean that they need to invest in technology. They can borrow the technology offered by AMCs to enhance their efficiencies. For instance, we provide an app, an exclusive Advisor Portal for IFAs and a host of other conveniences they can use.
How has been your AMCs progress in the B15 segment?
Our B15 market share is going from strength to strength. The B15 assets are growing 14% as against the growth of 12% recorded by T15 market. We have equal number of investors in T15 and B15 markets. To further augment B15 growth, we launched Big15 Ideas for B15 Markets Training Module for IFAs. We also introduced ‘Nivesh Mahakumbh’ a mega scale Investor Awareness Programme in cities like Jabalpur and Belgaum drawing investors from within 200 km radius of host location. We aim to reach at least 1,000 investors in each such programme, and plan to extend this to many more cities this year.
Are you seeing new distributors taking up MF distribution?
Yes, the number of ARNs has been in the rise. A lot of bankers, and those with experience in wealth management, especially in the age group of 40-43 years with experience of 10 years, are taking the entrepreneurial plunge by becoming advisors. Also there are a lot of people with non-financial background, and expertise in digital/ technology platforms who are creating platforms to enable paperless MF investments.
