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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???