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Revamp Model
Mutual Fund Industry
Presented By Team OhNo
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The Indian Scenario
Main objective Today Earn
Money and put that money to
good use to take care of all
your future needs 3000+ number of CFPs in
India
100,000+ unorganised retail
distributors for Mutual FundsIndia One ofthe Largest
Economies in
World
GDP 8.7%
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Before the Ban
Wants to invest Rs.100 Wants Commission
Rs. 100 Rs. 100
Rs. 2.25 ( )
Gets utual unds Gets utual unds
Worth Rs.97.75 Worth Rs.2.25
The returns of the investor are affected !
Rs. 97.7 (MF)
Distributor benefits through entry load !
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What prompted SEBI for Ban?
Entry loads encouraged agents(Distributors) to
churn the client portfolios and AMCs to come up
with New Fund Offerings (NFOs)
To discourage this mis-selling, SEBI eliminated
Entry loads
But, because of high entry loads in ULIPs,
distributors are encouraged to sell ULIPs ratherthan MFs
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After the Ban
Wants to invest Rs.100 Wants Commission
Rs. X
Rs. 100
Gets Mutual Funds Negotiates for commission
Worth Rs.100 by cash directly
Rs. 100 (MF)
Rs. 100
Investors and SEBI like this.
Distributors dislike this.
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Mutual Funds v/s ULIPs
Governed by SEBI
Entry Load was around. %
Entry load now eliminated
MutualFunds
Governed by I
More of Investment andless of Insuran e
Entry load of -4 %
ULIPs
Both MFs and ULIPs are sold by
means of Feet-on-street medium
Distributor
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How to regain business of the MF industry?
Reducing ULIPCommission
rate
Reducing
operating costs
Promoting t eer ice c arge
culture
Using ot er
Distribution
c annels
The Revamped Model
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Balancing ULIP Commission rates
All Mutual Fund Companies can come together andapproach SEBI to pressurize IRDA through the Govt. of
India to reduce the Entry load in ULIPs
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Current Scenario
A Distribution
Problem !
Mutual Funds
DistributorManufacturer Customer
Distributors are the controlling agents
AMCs can explore new media of distribution like
Corporate Tie-ups with Banks and Post Offices
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Mutual Fund MANDI
Currently mutual funds being sold
through Chartered Financial
Planners, Retail distributors, Banks
etc.
Opening of sister concerns by AMCsto directly sell/buy the MFs.
Transparency
Operational cost
More stakeholders,
Less Efficiency
Less stakeholders,More Efficiency
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Alternative Approach
SEBI manages - Stock market activities.
Manage mutual funds and other
investment schemes
As ULIPs invest in share market, SEBI can
have a control over it
Insurers can seek SEBIs approval for
ULIP products to govern entry load for
ULIPs
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SAMPLE PROMOTIONAL CAMPAIGN
MUTUAL FUNDS ARE S UBJECT TO
MARKET R ISK! LETADVISORS
HELP YOU!
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Optimizing Operating Cost
Optimization is the need of hour
Increasing operational efficiency
Promotion through incentives todistributors and retail distributors
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Exploiting the online route
Portals of online investing
AMFI website
MF websites
Online presence of young potentialinvestors is not being exploited
Social Media Marketing + Media Marketingof online capabilities
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Questions???