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Mrin Agarwal was a very successful wealth manager in an MNC bank, then quit to start her own HNI focused MFD firm which also became very successful and then took a sharp turn in 2015 towards focusing full time on investor education through her firm Finsafe. Finsafe has already counselled over 250,000 investors across over 1500 sessions. Finsafe works closely with over 50 large companies, guiding their employees to become wise investors.
These 250,000 investors are mostly in the 23 – 45 age group, well educated, professionally employed individuals.
Mrin says nothing much has changed in the way investors are taking their investment decisions. Most of them are very product focused – recent returns tables drives interest in specific mutual funds. Very few are aware of financial planning and the need to have a holistic view. Products that are marketed well on digital platforms is what they are most aware of – including high yielding bonds, P2P lending. The desire to seek maximum return without adequate understanding of risk is still largely prevalent.
Awareness of independent financial intermediaries like individual MFDs and RIAs is very low among this set. They are well aware of banks and fintechs as financial intermediaries. They also don’t see the need to seek out an experienced advisor/guide as they believe they are getting all the information they need digitally through fintechs. Even the few who may want to seek out an expert, don’t know where to start looking to find one. The fact that today’s new investors don’t even know about your existence is an uncomfortable truth that MFDs have to understand, acknowledge and then remedy.
Mrin says the biggest financial need of this set is not investing – it is about helping them sort out their borrowing mess. Buy-now-pay-later has messed up their finances and they need guidance on how to unentangle the web of loans they have accumulated, pay them down systematically and emerge debt free.
The next big need in Mrin’s view is to help them understand risk-return trade-offs. MFDs and RIAs can play a big role here and Mrin encourages all MFDs and RIAs to get active on social media, highlighting this aspect.
An idea worth considering: when you come across any aggressively digitally marketed investment product that seems risky to you, get active on social media explaining clearly and briefly the risk-return trade-off of that product and why you would be very cautious about investing in it. These tweets/reels/shorts are likely to be seen by this investor segment – which not only helps them, but also makes you visible in that segment.
Yes indeed social media is the most effective tool for MFDs to increase their AUM
Mrin shared wonderful ideas. However, I guess the likes of Bond karts are regulated by SEBI. But the products that claim are offering 13-14% pa interest including Covered Bond etc should carry a Disclaimer that Bonds kart does not bear the responsibility of issuer and their offerings. But, the people who get carried away with such mouthwatering return products anybody would pay any heed to a Word of caution.
Thanks to Mrin for highlighting on the importance of MFDs role and we need to phase it out. MFDs practice of Financial Planning if received well by the investors then things can work better.
Wow! What a video Vijay. And also thanks to Mrin. You nailed it. MFDs need to upgrade themselves for the GenNext investors. Skill development is the key to growth in the MF industry. By the way, effective communication is also primarily important to keep our investors aware of the latest developments. Thankyou both for the informative video. Thanks once again Vijay for your amazing videos. Honestly, keep looking forward to your posts everyday. God Bless You.
I agree that media or the various platforms available for investing should refrain from saying "You have already lost xxxxRs. as Commissions". This kind of message sends a wrong signal that MFDs are only in the business for commission.
Very good content
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