WF: In what way do you see the new BSE/NSE MF platforms impacting the life of advisors? Would you consider doing mutual fund transactions for your clients using these terminals or do you think life will continue as per the current mode.

Pradip: We will use all the modes - the current mode, the BSE/NSE platform mode and the new platform that is being made by AMFI in association with all mutual funds. Having said that we would not like to transfer our existing clients, who are doing mutual funds manually by taking advice from us. So they will continue in that mode only. But I think mutual funds buying and selling through terminals which open up the market a lot, because it will be able to reach the smaller towns where mutual funds currently do not have connectivity, but where stock do have. I would see a situation whereby instead of buying and selling Reliance, Tisco or any other stocks, I would be probably be selling diversify equity fund or ELSS funds using a terminal.

I have been traveling a lot throughout the eastern region and I have seen that insurance companies have reached many many places. The big 4-5 insurance players are having minimum 70 to 100 branches each in the eastern region, where as mutual funds have been able to reach only I would say 10-15 places, which means that they have banking facility and you can submit the application and cheque at an acceptance point within the town.

Once you have terminals, mutual funds will also be available easily in these 70 towns because stock broking has reached to almost all places. So my thinking is that I will be reaching those places where there is a terminal or even if there is no terminal, if I am able to create a market for mutual funds, I will put up a terminal. In fact I have started putting up terminal in few places in West Bengal.

WF : You have also done a major market expansion program through an innovative MF offering - can you take us through this?

We recently held an investor and associate partner meeting in a town called Macheda in Midnapur district - some 70 kms from Kolkata - in a football ground where over 5000 people attended. We are promoting novel concepts that are an innovation in the mutual fund industry.

One innovation is our Group SIP product - which we have launched in association with JP Morgan. The concept given by me was discussed in their Hongkong headquarters and it was approved from Hongkong.

Group SIP is meant for investors who do not earn a regular fixed salary. We have special tie-ups with companies and co-operatives that make commission payments, incentive payments or any other forms of payments to various of their agents in small towns and villages. They could be agents for any product or service. One of our group companies signs up these individuals for the Group SIP program wherein the company making the payment agrees to deduct a minimum of Rs. 500 and a maximum of Rs. 3000 from the cheque being issued to their agent - as contribution towards the Group SIP. One consolidated amount is then given to JP Morgan each month towards this Group SIP contribution.

Individual KYC is done for all participants in the Group SIP program. Many of these individuals have never invested in mutual funds, do not have sophisticated bank accounts and do not have PAN cards. When PAN was made mandatory, when I was roaming in the rural market, I found that people do not have PAN. So what we did is we took the agency of PAN card. Right Choice is also preparing PAN card for these investors. In the last one year we have prepared around 5000 PAN cards in rural areas.

In the last 4 months since launch, we have enrolled over 700 investors in the Group SIP program. I plan to take this up to 5000 by March 2010.

I would like to work with more AMCs who, like JP Morgan, believe in investor education - because I think without educating one should not start investing. In the event I mentioned where over 5000 participants gathered in a football stadium, we also had JP Morgan speaking - in the local language.

My target is that by 2011, I will be able to give 25,000 to 30,000 new investors to the MF industry. This is not new folios - these are investors who have never invested in mutual funds before.

We have branches in 10 locations in East - we will step this up to 20 in 2010. In many of the new branches, we will use NSE terminals for mutual funds - these are towns where investors have to make DDs for MF investments as there are no points of acceptance.

In fact we are today the largest franchisee of Kotak Securities in the country. A few days after I collected the Wealth Forum Advisor Award from you, Kotak Securities recognized us as their largest franchisee.

Pradip Chakraborthy receives the Wealth Forum IFA Of The Year 2009 - Eastern Region Winner Award from Didier Turpon, Deputy MD of SBI Funds Management, Navneet Munot, CIO of SBI Funds Management and Vijay Venkatram from Wealth Forum.

We have built our own MF platform and are encouraging our clients to take soft copies of account statements from there - instead of asking for statements from AMCs. The cost of printing and dispatching an account statement is Rs.20 for AMCs - if we can get our clients to take soft copies, we will be able to give cost savings to our AMCs. This becomes especially important when you are focusing on small ticket SIPs.

WF: Do you find a lot of resistance from these first time investors towards mutual funds and equity markets?

Pradip: No first time investor does not know much about mutual funds, though they know about the insurance and I tell you, they are investing in insurance where ULIP is giving very high charges. I started asking - when you are investing in ULIPs, why are you not investing in mutual funds? We also sell insurance - but where charges are high, and products are comparable, it is better for investors to go for mutual funds. This way, we slowly get them to invest in mutual funds.

Now, with the Group SIP program, we plan to go more aggressively into rural markets and tie up with more companies, co-operatives and panchayats to make deductions from participating members, as contributions towards the Group SIP.