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Excerpts of his presentation at the Mutual Fund Distributors Summit

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Earning

The above slides are taken from Mr Debashish Mohanty’s (President and Country Head , Retail Business at UTI AMC) presentation at the Mutual Fund Distributors Summit 2017.

While there may be a perception that Financial Advisors earn a great deal of commission, the facts are quite contrary. Nearly 64% of the IFAs earn less that Rs 8000 per month and about 20% earn between Rs 8500 and Rs 42000 per month. Thus a total of 85% of the IFAs earn less than Rs 42000 per month.

 

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Term

The above slides are taken from Mr Debashish Mohanty’s (President and Country Head , Retail Business at UTI AMC) presentation at the Mutual Fund Distributors Summit 2017.

We all know that investing yields best returns if given enough time. But very contrary to this fact less than 10% of investors keep their investments beyond 5 years. Hence it is said that investments make good returns but investors don’t.

 

 

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Digital

The above slides are taken from Mr Debashish Mohanty’s (President and Country Head , Retail Business at UTI AMC) presentation at the Mutual Fund Distributors Summit 2017.

While digital is picking up, if one delves a little deeper one will observe that ‘digital’ is helping the financial advisor a lot more than the investor who is wanting to transact on his own. Only 20% of the transactions are executed by the investor while 80% of the transactions are executed by the advisor using different platforms such as MFU, BSE, NSE, AMC websites, Distributor websites etc.

 

 

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Direct

The above slides are taken from Mr Debashish Mohanty’s (President and Country Head , Retail Business at UTI AMC) presentation at the Mutual Fund Distributors Summit 2017.

Please note that direct AUM is 38%. Seems scary. But on deeper scrutiny you will see that this 38% AUM is coming from 6% folios. Hence one need not be overtly worried about “Direct” taking over. People need advice. People need guidance. As an advisor, we must be problem solvers and not a product peddler. The business is evolving and the market size is growing. Different businesses will co-exist. Direct business largely comprises of RIA, PMS, Family Office, Distributor mobilised direct business, FOF, IFA’s own business. MF/Bank employees.

 

 

 

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Where is the focus

 

The above slides are taken from Mr Debashish Mohanty’s (President and Country Head , Retail Business at UTI AMC) presentation at the Mutual Fund Distributors Summit 2017.

Institutional folios comprise only 2% of total folios but 49% of total AUM. So while we may all believe that the industry is growing at a very fast pace, in reality there is a lot of potential and lot of work has to be done. AUM may have grown 5 times but against that growth folios have grown twice and considering that at an average every investor has 5 folios, the growth of unique investors remains abysmal.

 

 

 

 

 

 

 

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Fooled by Folios

 

The above slides are taken from Mr Debashish Mohanty’s (President and Country Head , Retail Business at UTI AMC) presentation at the Mutual Fund Distributors Summit 2017.

6.20 cr. folios projects an impression of massive growth of industry but the real picture emerges when one looks at the unique number of investors in the industry. At 1.07 cr. this is number is quite abysmal. A lot of work has to be done to grow the number of investors at the ground level. Investor education is certainly a great tool in the hands of IFAs. They need to use this tool and focus on increasing the head counts. The “mutual fund sahi hai” campaign would create interest among people making it easier to invite people to attend the investor education camps/programs. But in the end of the day the IFA is the foot soldier who needs to reach out, educate, educate and educate. This will draw the customer to the IFA to fulfil his or her investment needs.