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Dear AMCs, please adopt this best practice

Sandeep Gandhi, Mega Financial Planners, Rajkot

15th September 2015

In a nutshell

While internet and phone based distributor initiated transactions are a step in the right direction, not all clients are comfortable with OTPs, net banking and SMS invest processes, especially in smaller towns

Fund house driven call backs for transaction confirmation, which has been pioneered by a leading fund house, is the most convenient option, and should be adopted as best practice by the industry

The acid test for these services was during the recent strife in Gujarat, where this facility proved very beneficial to investors and distributors

MF Utility will do well to adopt this as best practice too, to make life more convenient for distributors and give them tangible value add

Various AMCs are now offering internet and phone based distributor initiated transaction services. These efforts are good, but in my experience, some of them are failing to catch on because they are perhaps a little complex, especially for people in Tier II and III towns.

Not all clients are comfortable with net banking

In most cases of distributor initiated transactions, the investor is supposed to go through net banking to confirm the payment, which for many investors means one more step of obtaining a "One Time Password". Many clients are not very comfortable with this process, and if it looks a little complex for them, they prefer not to adopt it.

Some fund houses offer an SMS invest facility, but here also, I have seen clients getting confused as they need to remember scheme code and other details to punch in a proper text message that will trigger the transaction. We have to understand that for an investor to embrace technology, it must be at least as simple if not simpler than his offline process. His offline process today is that his advisor fills up a form and sends to him for his signature. He just signs the form and the rest is taken care by the advisor. For distributor initiated online transactions to really take off, our investors must get the same level of convenience that they are presently getting from us.

Telephonic confirmation is the most convenient option

One facility that really scores well in this regard is the telephonic confirmation offered as part of I Pru Touch. When we punch in the transaction on our I Pru Touch mobile apps, the fund house makes a call to the client to confirm the transaction. Transaction is executed on the basis of this phone confirmation.

For our investors, this is the most convenient format, as everybody is very comfortable with receiving calls on their phones and giving confirmations over a phone call. There is no new technology that they have to learn, nothing intimidating about it, and it is perhaps even more convenient than signing a form that our person takes to their home or office.

Acid test was recent unrest in Gujarat

For us, this really saves a lot of time and effort in transaction execution. I have 5 people in my office who have I Pru Touch downloaded on their mobile phones. In recent weeks, when we had a lot of unrest in Gujarat, and curfew like situations on a few days, this facility really came in very handy. Markets went down significantly, clients were interested in investing into the weakness, and our team was in their respective homes, completing transactions for clients through I Pru Touch. This was also a time when SMS facility was blocked for some time, to stop rumour-mongering. But phone calls were being made, clients got confirmation calls, and transactions got executed.

Time for all fund houses to adopt phone back confirmation

The purpose of my writing this piece is to encourage all fund houses to adopt similar phone back confirmation services. This will really help distributors in enhancing efficiency of their operations and also serve clients much better. It is important for all fund houses to adopt uniform processes for distributor initiated online transactions. We don't want a situation where we have to remember 10 different processes for 10 fund houses that we normally deal with.

MFU needs to adopt similar process

On a related note, I would also like to point out that MF Utility needs to think through similar process innovations and convenience. My own experience with MFU has been that our work has actually increased rather than decreased. In Rajkot, R&T offices are close by and conveniently located. It is not really a big hassle to send physical forms to them everyday. But, with MFU, we now have to do all the scanning of forms and then send them anyway. There is additional workload of R&Ts that we are undertaking. If MFU can replicate transaction execution like we have with I Pru Touch, that will be a big benefit for distributors and investors.

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