Mint Mutual Fund Conclave Key takeaways

26th July an otherwise a normal busy Friday in Mumbai,but Friday seemed it was more like The 26th July 2005.But Mumbai being Mumbai we all were commited to reach the Mint Mutual Fund conclave to hear the voices that matter in the Mutual fund space.Interesting thing about the event was the theme.

Building Investor centricity

Well I had the privilege to be a part of the event to witness some really strong and impressive voices that are responsible for the growth of Financial Investments Industry in general and Mutual Fund in particular.

As a panel, they discussed varied topics like whether the industry should move in a Transactional approach direction,especially when technology is getting in every part of our lives o r it should stick to Relationship approach as it has been traditionally.Another interesting discussion was in the light of current environment as to how its Time to look beyond returns and lastly the panel discussed the Regulatory environment in which we are operating as an industry.

For the benefit of those who couldn’t attend the conclave,I am sharing here the broad thoughts which I could gather and get my attention on

Disclaimer: These are purely my key takeaways ..there may be some more which I may have missed

Transcending Transnational Relationships: Engaging as Partners

Pravin Jadhav Paytm money

There were some good insights by Pravin Jadhav,Director Paytmmoney.He shared how investors are investing mostly on hear and say and how nudging them while on boarding could help them,get in the right direction.Further the transactional approach led by technology is creating an experience of ease while also bringing scale (currently 5000 sip per day)

On asking how selling direct plans will make money,he shared the platform is still evolving and key is to penetrate in Tier 3-4-5 places and there would be other avenues like Lending,stock broking,NPS wealth management etc to make money in future.The debate here should not be Direct vs Regular anymore it should be Transactional vs Relationship.

Neeraj Choksi

On asking about the future of traditional intermediaries,Roopa Venkatesh,a Financial consultant and Neeraj Choksi,Founder NJ strongly opined on how relationships is the key in managing clients and simply execution may not serve the purpose.The intermediary should have a strong belief system and keep growing on its interpersonal skills.Though margins are shrinking but the opportunity is multi-fold from current 2 crores investors to 20 crores. There is dire need for qualified advisors and technology if used meaningfully could just help scale up the industry to new heights.He also shared how business environment is unfair to advisors and how managing behavior of investors is the key proposition and not just selling. Commissions are paid are for emotion handling and not for selling mutual funds.Investment is about Relationships/Emotions/Goals/Background commitments and needs

Sanjiv Singhal ,Founder Scripbox

Interestingly Sanjiv Singhal,Founder Scripbox had interesting insights where he shared how Scripbox have married technology with relationship and advice.Though it still has its own share of challenges but its positioning is definitely not execution instead they focus on Objectives/Goals-Asset Allocation and finally schemes

To conclude while designing a business one must consider the following

·        One on one communication vs mass communication

·        Relationships vs Returns

·        Factsheet Returns vs Folio returns

·        Share stories of how,there are real investors like you and me who have created wealth.

·        Let Technology be the backbone for execution and top it up with relationships.

AMC CEO panel on their views on Time to look beyond markets

How long we have come,can simply be checked If someone would have asked in pre-2014

Mutual Funds are and the answer would be subject to market risk and now when someone says Mutual Funds …tap comes the reply Sahi hai said Radhika Gupta of Edelweiss AMC

I was super impressed with Kalpen Parekh’s views on Communication to investors and advisors.He simply put how Marketing is more important than Markets.How we can manage clients while they invest.He gave a beautiful example of how they communicated when someone invested in their small cap scheme and how they showed -67% in a big font communique to stress on the risk element.

On the other hand Radhika focussed on communicating more on Risk.What is Risk simply put,its a loss of capital, but it can also mean other risks like liquidity risk, where you can't sell the investments when you want.

SBI Mutual Fund’s Ashwani Bhatia focused on how an AMC can build a brand,based on communication and processes rather than just returns or Star fund managers.

The panel also requested the media to stress on long term returns and other attributes like Risk taken to generate the returns,turnover ratios etc and not just judge them based on 1-3 years returns.

With a campaign like Advisor Zaroori hai the AMC has shown how important an advisor is to generate returns and achieve goals.While recent campaigns have made investors mature on Equity,but there's still lot to do on Fixed Income as far as risks are concerned.Chandresh Nigam of Axis emphasized on Achievement of goals as a communiqué rather than just Returns

Advisor role is to share the following with the investor

·        Where the returns are coming from & talk about underlying business.

·        Portfolio Turnover.

·        Indexation benefits.

·        Reward investors with say low expenses if he crosses 5-10 year milestones.

·        Product innovation like we had one with insurance in the past.

·        A case in point shared by Kalpen was PPFAS welcome kit,where the investor is anchored with long term investing by sharing nudges and wisdom bytes of Warren Buffet and the likes.

·        Lastly very importantly Advisors themselves should be trained to get anchored to goals and focus on asset allocation than just returns.

·        Very importantly one should raise caution sign especially when an investor is investing in an so called risky investment and not just get carried away with returns.

·        Let’s not oversimplify things and hide the facts especially on Risk.

·        In good times do not extrapolate things and same in bad times.Instead make them ready for bad times in good times and vice versa.

When asked on the The Next Big thing,after SIP for Mutual fund industry panel were quick to share their ideas-

·        Indexing Products

·        Multi Asset product to harness volatility of a particular asset class

·        Rebalancing products

·        Passive Fixed Income Fund

·        Feature based products. Feature is Future.SIP is a Feature

Would be really glad to have your views on the industry future and how it can become a world class one for all of us associated with it-Investos ,AMC,IFA,RIA and all others in the ecosystem