Let's inspire each other, with this new initiative
Kailash Kulkarni, CEO, L&T MF

imgbd I am very happy to put my thoughts together for this inaugural piece in the new initiative that L&T Mutual Fund is creating in association with Wealth Forum, called "The Innovators". Change they say is the only constant, and those who help catalyse change often land up on the winning side, as compared to those who resist it. Embracing change is not about reacting to change, but its more about leading change. That in essence is what innovation is all about - leading change.

Two types of innovation

Management theories tell us there are two broad types of innovation: incremental innovation and radical innovation. The latter has now acquired a new buzz word called "disruption". Disruptions are big, they are few and far between. Disruptive ideas are high risk - they either change the game or they kill the potential disrupter.

Incremental innovation

But what is more pervasive, and which each one of us in this business can adopt is the former: incremental innovation. Here is a textbook definition of incremental innovation: "Incremental innovation is a series of small improvements or upgrades made to a company's existing products, services, processes or methods. The changes implemented through incremental innovation are usually focused on improving an existing product's development efficiency, productivity and competitive differentiation."

There is a lot that can be achieved by any business - whether an IFA or a fund house - by adopting a culture of incremental innovation. This culture calls for continuous thinking on how we can make a product or a process more efficient, more effective, or in any way help deliver a better outcome. At L&T Mutual Fund, we are passionately committed to the philosophy of incremental innovation.

Incremental innovation: our SIP story

Let me give you just one example of incremental innovation in the most common aspect of our business: SIPs. A couple of years ago, we introduced "Multi SIP" - a single application form and single cheque through which you could get your clients to invest in multiple schemes of L&T MF. I am happy to see that this innovation was also leveraged by other fund houses, resulting in higher convenience to distributors and investors.

Then we introduced SIP Top-Ups, to help investors increase allocations to existing SIPs as and when they had more disposable savings, rather than starting new SIPs. Recently we introduced SIP Renewal Reminders. This is a quick and easy way for distributors to reach out to their investors and encourage them to renew SIPs, through just one click.


Apart from ensuring renewals, the other big challenge that we see in SIPs is that investors sometimes miss SIP instalments - either because of shortage of funds on the SIP date or any other reason. This creates a gap in their financial planning exercise. To help overcome this situation, we have created a mechanism called SIP Representment.


We have automated a communication to investors, reminding them that they missed an instalment, and encourage them to make good the missing instalment through the representment process.

If you look back at the process for SIPs 5 years ago and compare it with what we have today, its not just L&T - the industry has done a lot in terms of incremental innovation which has made SIP investing much more convenient and far more aligned with the way individuals manage their personal finances. As you keep innovating, you keep enhancing the investor's experience, and you therefore keep growing your business. That is the power of incremental innovation. As I mentioned, what is required is an orientation, a philosophy of constantly asking yourself - how can I make this product/process more investor friendly?

Core proposition does not change. Delivery mechanisms change.

In the financial advisory and distribution businesses, like with asset management, the core function has not changed. For an IFA, for as long as I can remember, its always been about giving sensible guidance and excellent service to your investors. That has not changed and will not change. But a lot is changing in the way this core function is delivered. My submission to my IFA friends is that adopting a philosophy of incremental innovation will be hugely beneficial to not just embrace change but lead change and emerge stronger.

Lets inspire each other towards incremental innovation

I would like to see this new platform "The Innovators" become an idea sharing platform on incremental innovation in our business. If we can inspire each other to embrace this philosophy which we at L&T Mutual Fund have whole-heartedly embraced, I am confident that we will all not only serve our investors better, but will also build much stronger businesses over time.

All the best, and happy innovating!


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