The ever-grounded D P Singh offers 3 gems of advice for all MFDs:
1. Don’t get complacent with MTM driven AuM growth and income growth. Focus on net sales as MTM can go up today and down tomorrow. More wallet share from existing clients and bringing in new clients – that’s what your focus should always be on – that’s what he is driving his team at SBIMF to also focus on.
2. Discard your margin focus and embrace volume focus if you really want to make it big in this rapidly expanding market. Lower margin products tend to bring in much bigger ticket sizes and give you the opportunity to bring in new clients as well.
3. Don’t over-sell liquidity in mutual funds, promote longevity of investments. Liquidity is a comfort feature – only to be used in real emergencies. More you promote liquidity, more challenges you will face as you keep bringing in new business while redemptions leak out from your AuM. Longevity of investments is the only win-win-win for your clients, yourself and for fund houses.
As credit growth accelerates in the economy, focus of banks has turned to deposit mobilization to fund credit demand, and consequently focus on selling mutual funds has reduced to some extent. This is a big opportunity for MFDs as they can reach out lot more aggressively to savers and investors and win more new clients in a less competitive environment.
Government and our regulator are very focused on ease of doing business and this translates for investors into ease of investing. Expect single KYC across all financial markets and products to become a reality in the coming months. This can be a big market expansion opportunity for all.