SIP is a financial innovation that has positively touched the lives of millions of Indian savers and we as an industry should be justifiably proud of our collective efforts to make this happen.
Beyond SIPs, there are other innovative facilities that the industry has been offering for some time now – which can enhance investor outcomes meaningfully – but which haven’t got the kind of attention and traction they deserve.
One such facility is Step-Up SIPs or SIP Top-Ups – where you pre-define an amount or percentage annually by which your SIP contribution should increase. This can work very well for all salaried employees who get annual increments – putting aside a portion of these increments into Step Up SIPs can help them reach their financial goals faster or can help them expand their goals.
Deepak says for any facility to gain more traction among investors, two enablers are required: convenience and awareness. UTI MF has enabled Step Up SIPs on their investor app as well as UTI Buddy – their distributor app and has put together an array of multi-media content explaining the concept and illustrating Step Up SIPs vs regular SIPs.
Deepak encourages all MFDs to make use of these resources in client conversations and help many more investors sign up for Step Up SIPs.
Another powerful facility that is not being fully exploited is the systematic withdrawal facility – SWP. SWPs are excellent cashflow solutions for retired individuals and anybody who needs regular cash flow. SWPs set up on hybrid funds can provide tax efficient regular cash flows while also fighting inflation to preserve purchasing power of an investor’s retirement corpus.
Deepak says that while SWPs set up in the industry is as yet only a fraction of the 9 crore SIPs that have been set up, he will not be surprised to see SWPs gathering significant momentum in the coming years and perhaps reaching the current level of SIPs in a few years from now.
SWP focus is not only a win for retired individuals, it can also be a great asset gathering initiative for distributors as retirement corpuses with SWPs tend to involve substantial lumpsum investments.
While STPs (systematic transfer plans) are very popular for breaking down lumpsum investments into multiple tranches to invest involatile equity markets, another by-product – flex STPs / smart STPs – perhaps deserves more attention from seasoned investors who are looking at slightly more efficient timing of their entry into markets.
Some other facilities that Deepak highlights for distributors and investors is UTI MF’s YouSave – a digital first convenient solution to start investing, start small and most importantly, access your money whenever and wherever you want (upto Rs.50,000 or 90% of amount invested) through a UPI interface.
UTI MF also offers a suite of goal based investing facilities including multi media explainers and calculators to help investors make successful goal based investment journeys.