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WF: 85 lakh SIPs with annual inflows of over Rs.26,000 crores. A third of all equity inflows coming through SIPs. Would you say these numbers are a validation of the industry's investor education efforts in recent years?
Raghav: SEBI's decision to set aside 2 bps of management fees for investor education has been a significant step and has ensured that there is a dedicated pie of funds available specifically for awareness initiatives; and our efforts have started to pay off. The industry saw nearly Rs 80,875 Cr inflows YTD (as on 30th Dec 2015) coming into the industry through equity schemes, underscoring the thesis that equalization of household savings is getting entrenched despite a volatile equity market.
We have been consistently communicating that SIP is the best way of investing. In fact, we conducted a Right SIP campaign to highlight that SIP makes sense only when the amount invested helps in realizing your dream. The intent has been to encourage investors to make use of wealth creation tools like SIP calculators in order to arrive at the right amount of SIP, or seek guidance from a financial advisor for the same.
WF: The first 8 months of this financial year has seen an unprecedented 25 lakh first time MF investors coming into the industry. Is education becoming a big business driver or would you attribute this more to the relative attractiveness of capital markets compared to deposits, real estate and gold?
Raghav: Through our communication over the last few years with help from the media, we have been pointing towards the overweight exposure of domestic investors in physical assets and the underperformance of physical assets. In last five years, investors have not made returns in physical assets like gold and real estate.
We are now seeing an increase in financial savings which is a very good sign because eventually a part of these financial savings are likely to convert into mutual fund investments. The industry lays a lot of emphasis on investor education initiatives which led to the increase in first time MF Investors. Investors are also increasing their purchases through systematic investment plans and looking at longer investment horizons.
WF: What are some of the key insights that your team has developed while connecting with lakhs of investors across the country through your various education initiatives?
Raghav: While a majority of Indian retail investors are reasonably good at saving money or allocating towards physical assets like real estate or gold, they are still bereft of the long term wealth creation that investing in financial assets could offer. A lack of financial literacy amongst the Indian cohort, hinders them from taking sound investment decisions. Thus, we believe that creating investor awareness is a crucial component of investing.
While engaging with investors it is important to ensure investor-friendly communication to help them take the right investment decisions in order to meet financial goals. The content needs to be structured based on the target audience. For instance, in smaller cities and towns, we have ensured that the content is elementary in nature and these workshops are conducted in local languages. It is also important to make learning fun through games and animated videos to keep the investors glued.
The market potential is infinite and efforts from financial advisors towards investor education are commendable.
WF: Many fund houses have attempted very interesting innovations in investor education in the last couple of years. Looking back at ICICI Pru's efforts, what would you say has been your high-impact initiatives this year?
Raghav: ICICI Prudential MF saw a prolific year in terms of investor education initiatives with several new ideas and initiatives seeing the light of the day. Some of them, as under:
'Stay Healthy Stay Wealthy' - Relating fitness with financial well being
In 2015, we launched 'Stay Healthy Stay Wealthy' campaign, a unique initiative where we conducted several investor camps to create an analogy between physical fitness and financial wellbeing. In these camps, while our investment professionals highlighted the importance of financial health, a team of medical health professionals carried out a health check-ups.
'Health Wealth' Booklets with set of health wealth mantras, were distributed during this event. These booklets have been very well received across distributors and investors.
IPru Insights - A monthly investor newsletter
We had launched a monthly newsletter for investors - "IPRU Insights" in October 2014. Till last year, the newsletter was reaching investors in a digital version. From April 2015, we have started publishing printed copies for distribution to investors in camps and meetings.
We recognize that a dose of relevant insights on markets and investment concepts is crucial for investors to help them build a portfolio and achieve their financial goals. This newsletter is an endeavor to give relevant investment guidance and help investors make an informed decision about their investments for long term wealth creation. The newsletter consists of several segments which include investment checklists, fundaclear (concept based articles) tips to invest better, articles on relevant investment themes and a lot more.
Investor Webinars
This is industry's First such Initiative for Investors, where investors can participate in seminars from their place of convenience. Through these webinars, we intend to communicate our house views on macros and markets to help investors take better investment decisions. Distributors can take benefit from this and invite there investors. On January 22nd 2016, we have scheduled "Dhan Ki Baat " - an Investor Webinar with S Naren, CIO, ICICI Prudential AMC. We request all advisors to take advantage of this initiative by inviting their investors to the webinar.
Infographics
We have created an Invest Correctly section on our website dedicated to investor education helps investors find answers to their investment queries. It has many sub-sections covering a wide range of topics such as Basics of Mutual Funds, Understanding Debt Funds etc.
Under Invest Correctly, a section called 'FinAware' focuses on demystifying financial concepts and the Info-graphic section serves as a simple visual guide to understand the concepts of Mutual Funds. We also have a compilation of these info graphics in the form of a booklet.
http://www.icicipruamc.com/InvestCorrectly/Infographics.aspx
Use of Calculators
We actively promote the use of calculators like the Right SIP Calculator & Power of Compounding Calculator to encourage investors to adopt a more holistic approach towards planning for their goals. A Systematic Investment Plan (SIP) makes sense only when the amount invested helps in realizing your dream. Therefore, it is important to arrive at the Right SIP Amount. One has to simply enter the value of Financial Goal, Expected Rate of Return and Time Horizon to arrive at the Right SIP Amount. With Power of Compounding Calculator, you can find out how much your investments can grow over the time with power of compounding and you can accordingly plan your financial goal and means to achieve them.
Videos
We have created easy to understand educational videos to help explain various Mutual Fund and investment related concepts - for example, videos on topics like Invest the Right SIP Amount, Value Investing, Invest in Volatile Markets etc. have been created and hosted on the YouTube Brand Channel and our website. These videos are available in multiple languages as well. They are short and crisp with animation to make it more interesting.
Snake- Ladder game
Everyone has played Snakes & Ladders game in childhood, eaten away by snakes or stepped up through ladders. We have designed the game to make sure that investors find investment concepts 'fun to learn and east to remember'. This game have close resemblance with any one's personal finance life- To reach a financial Goal, one needs to cross all the snakes, in this case inflation, expenses etc. while utilize the ladders like equity investing, Systematic investing etc. to reach the destination faster.
IEP Pen drive
We created pen drives loaded with investor education material- videos, newsletter, booklets, info graphics to our distributors and investors. The idea is to have these educational properties reach our investors via their respective distributors.
Our advisor community can also contact the nearest branch and Relationship Managers for utilising all the investor education content available and for organising Stay Healthy Stay Wealthy Investor Education Camps for investors.
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