Motilal Oswal Asset Management Company Ltd. (MOAMC) is a public limited company incorporated under the Companies Act, 1956 on November 14, 2008, having its Registered Office at 10th Floor, Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai - 400025.
Motilal Oswal Asset Management Company Ltd. has been appointed as the Investment Manager to Motilal Oswal Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated May 21, 2009, executed between Motilal Oswal Trustee Company Ltd. and Motilal Oswal Asset Management Company Ltd.
Motilal Oswal 5 Year G-Sec Fund of Fund (G) - 10.0277Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive (G) - 11.5825Motilal Oswal Asset Allocation Passive Fund of Fund – Aggressive-Dir (G) - 11.6214Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative (G) - 11.0987Motilal Oswal Asset Allocation Passive Fund of Fund – Conservative-Dir(G) - 11.1404Motilal Oswal Dynamic Fund (Div-A) - 14.2282Motilal Oswal Dynamic Fund (Div-Q) - 12.345Motilal Oswal Dynamic Fund (G) - 15.7Motilal Oswal Dynamic Fund-Dir (Div-A) - 14.4666Motilal Oswal Dynamic Fund-Dir (Div-Q) - 12.5737Motilal Oswal Dynamic Fund-Dir (G) - 16.6457Motilal Oswal Equity Hybrid Fund - Direct (G) - 16.4498Motilal Oswal Equity Hybrid Fund - Regular (G) - 15.6495Motilal Oswal Flexi Cap Fund(D) - 27.1399Motilal Oswal Flexi Cap Fund(G) - 36.1049Motilal Oswal Flexi Cap Fund-Dir(D) - 27.2458Motilal Oswal Flexi Cap Fund-Dir(G) - 38.7521Motilal Oswal Focused 25 Fund - Direct (D) - 22.5303Motilal Oswal Focused 25 Fund - Direct (G) - 38.4866Motilal Oswal Focused 25 Fund (D) - 20.1758Motilal Oswal Focused 25 Fund (G) - 34.3763Motilal Oswal Large and Midcap Fund - Dir (D) - 17.1791Motilal Oswal Large and Midcap Fund - Dir (G) - 17.1936Motilal Oswal Large and Midcap Fund (D) - 16.5971Motilal Oswal Large and Midcap Fund (G) - 16.5971Motilal Oswal Liquid Fund - Direct (Div-D) RI - 10.0077Motilal Oswal Liquid Fund - Direct (Div-F) RI - 10.0043Motilal Oswal Liquid Fund - Direct (Div-M) - 10.0528Motilal Oswal Liquid Fund - Direct (Div-Q) - 10.026Motilal Oswal Liquid Fund - Direct (Div-W) RI - 10.0058Motilal Oswal Liquid Fund - Direct (G) - 11.2259Motilal Oswal Liquid Fund - Regular (Div-D) RI - 10.0055Motilal Oswal Liquid Fund - Regular (Div-F) RI - 10.0042Motilal Oswal Liquid Fund - Regular (Div-M) - 10.0515Motilal Oswal Liquid Fund - Regular (Div-Q) - 10.025Motilal Oswal Liquid Fund - Regular (Div-W) RI - 10.013Motilal Oswal Liquid Fund - Regular (G) - 11.178Motilal Oswal Long Term Equity Fund (D) - 21.2113Motilal Oswal Long Term Equity Fund (G) - 27.0014Motilal Oswal Long Term Equity Fund -Dir (D) - 25.3449Motilal Oswal Long Term Equity Fund -Dir (G) - 29.5712Motilal Oswal Midcap 30 Fund (D) - 26.462Motilal Oswal Midcap 30 Fund (G) - 43.3168Motilal Oswal Midcap 30 Fund-Dir (D) - 27.4366Motilal Oswal Midcap 30 Fund-Dir (G) - 47.6367Motilal Oswal Multi Asset Fund - Direct (G) - 11.0357Motilal Oswal Multi Asset Fund (G) - 10.8345Motilal Oswal Nasdaq 100 FOF - Direct (G) - 24.2465Motilal Oswal Nasdaq 100 FOF - Regular (G) - 23.9667Motilal Oswal Nifty 50 Index Fund - Direct (G) - 15.0498Motilal Oswal Nifty 50 Index Fund (G) - 14.9346Motilal Oswal Nifty 500 Fund - Direct (G) - 17.3864Motilal Oswal Nifty 500 Fund (G) - 17.1473Motilal Oswal Nifty Bank Index Fund - Direct (G) - 14.6152Motilal Oswal Nifty Bank Index Fund (G) - 14.4152Motilal Oswal Nifty Midcap 150 Index Fund (G) - 20.2464Motilal Oswal Nifty Midcap 150 Index Fund-Dir (G) - 20.5437Motilal Oswal Nifty Next 50 Index Fund - Dir (G) - 14.8476Motilal Oswal Nifty Next 50 Index Fund (G) - 14.6674Motilal Oswal Nifty Smallcap 250 Index Fund (G) - 20.7092Motilal Oswal Nifty Smallcap 250 Index Fund-Dir(G) - 21.0056Motilal Oswal S&P 500 Index Fund - Direct (G) - 15.4219Motilal Oswal S&P 500 Index Fund (G) - 15.2694Motilal Oswal Ultra Short Term Fund - Dir (Div-D) - 10.0245Motilal Oswal Ultra Short Term Fund - Dir (Div-F) - 10.0484Motilal Oswal Ultra Short Term Fund - Dir (Div-M) - 10.0316Motilal Oswal Ultra Short Term Fund - Dir (Div-Q) - 10.176Motilal Oswal Ultra Short Term Fund - Dir (Div-W) - 10.0357Motilal Oswal Ultra Short Term Fund - Dir (G) - 14.2037Motilal Oswal Ultra Short Term Fund (Div-D) - 9.9629Motilal Oswal Ultra Short Term Fund (Div-F) - 9.9737Motilal Oswal Ultra Short Term Fund (Div-M) - 9.9634Motilal Oswal Ultra Short Term Fund (Div-Q) - 10.1082Motilal Oswal Ultra Short Term Fund (Div-W) - 9.9665Motilal Oswal Ultra Short Term Fund (G) - 13.7219

AMC sales managers need to reorient themselves

  • Mr. Akhil Chaturvedi|
  • Head of Sales & Distribution
Akhil Chaturvedi
  • Not just distributors – AMCs too are feeling the pinch of the new regulations on commissions and TER
  • In midst of current challenges, we must not lose sight of the big picture – of India’s march towards a US$ 5 trillion economy and its implications on savings and investment flow from domestic investors
  • Digital channels impact on IFA business is over-hyped: they cater to an entirely different audience
  • Incentivization based sales efforts of AMC are now history: focus now will be on delivering meaningful content and communication to distributors and clearly positioning products and their role in meeting investor needs.

WF: What is the sentiment you are picking up from IFAs on impact of the upfront ban and potential rationalization of trail due to the upcoming TER reductions?

Akhil: Without doubt it is not a great feeling, there is overall concern on margins being squeezed across big and smaller IFA’s in fact any distribution channel for that matter. But while bigger IFA’s with sizeable assets will be able to adjust through this phase, the smaller ones are going to have to stretch their efforts and build scale in the business. This could take a while till such time there is reasonable AUM before breaking even and being profitable.
Honestly, it is not only about IFAs but AMCs including all channels of distribution are facing the heat, as it is not only the expected rationalization of trail in future but the current way of expensing out all distribution expenses from the scheme which has also impacted the margins of AMCs and to that extent some part of rationalisation of commission has already happened post 21st September 2018.
Over all, if you see in past few months abolishing of additional 20 bps expense in lieu of exit load has been bought down to 5 bps in open ended schemes and Nil in closed ended schemes including ELSS, in addition to this in near future additional 10-25 bps impact will come due to new slabs of TER resulting in over-all 30-40 bps hit on distributor margins. I don’t know if there is direct correlation but we are already seeing sales of November’18 much lower than that average of previous 6 months sales and maybe this is just the beginning of further slackness to come.

WF: IFA activation across fund houses has slowed down considerably and fears are being expressed about as many as 10,000 or more small IFAs exiting fund distribution consequent to the upfront ban. What can we as an industry do to stem this exodus?

Akhil: AMC’s through various platforms have tried to demonstrate to the IFA’s - the potential of growth for mutual funds in next 5-10 years, As I am writing for your article I am attending a conference ‘India Economic Conclave’ and the theme of the conference is around India being a 5 trillion dollar economy by 2025. Now imagine 15% of the economy being savings economy the opportunity size is huge running in several billions of dollars. Thus, it is natural that in any business when volumes grow the costs structures come down and sets off revenue loss because of drop in margins by higher volumes. So IFAs with long term commitment in business will definitely gain from this huge influx of savings boom in next 5-10-15 years.
AMCs will have limitations spending on distribution by way of sales incentives and other such programs, but can offset that by adding value through genuine and meaningful knowledge sharing programs/ workshops to help distributors gain knowledge and pass on to investors.
AMCs will add value by offering superior products which suit investor’s needs, give options in alternate space like PMS and AIFs for savvy investors who understand risks better. AMC’s through AMFI have initiated ‘mutual fund sahi hai’ campaign through both ATL and BTL activities to create awareness for mutual funds which would benefit IFA’s in smaller locations adding investors with much ease and lower cost. So, therefore IAP budgets will have to be used more judiciously in broad basing markets, increase awareness which will help industry grow.

WF: IFAs have historically been seen as the critical last mile connect that bring in new investors into the MF industry. More recently, large online players like ET Money, PayTM and the like seem to have taken on that mantle by bringing in large number of small ticket transactions. How do you see the role of the IFA evolving now?

Akhil: To the extent these developments are seen as a threat to IFA business I think it is more of a hype. I feel it could be a a waste of energy for IFAs discussing what will happen and expressing sense of insecurity. That’s because different channels, different modes of delivery and remuneration are suited to different customer segments and customer types. Digital and DIY is an option for sure, but not for every customer. At the same time customers will flirt with different options but it is for the IFAs to understand what they are good at offering and which customer is it relevant for.
We have gone through similar un-friendly distribution policies like introduction of Direct Plans, disclosure of commissions etc….tell me since then haven’t no of IFA’s grown leaps and bounds, haven’t business grown for IFA’s multiple times and haven’t no of investors managed by the IFA’s grown multiple times. I can tell you with quite confidence, even AMC professionals like me need advisor help to manage personal investments and risk management, and I have personally tried investing direct but failed miserably. So, I am sure eventually if the IFA are genuinely trying to manage investor needs and services well there is no need to be insecure for business or existence.
Digital channels will create market for themselves; they haven’t made any headway in moving existing investors of IFA’s on to their platform. We are a large market with 1.3 bn people thus in future there is no reason to be insecure with new players coming in the industry but much rather worry about one’s ability to grow with changing needs of investors and their needs from financial advisors.

WF: The RIA space which was meant to be the top end advisory proposition, is now evolving into a customer acquisition vehicle with the likes of PayTM and ETMoney using it as a low cost model rather than an advisory model. How do you see the RIA space evolving in the coming years and what might its implications be for traditional distribution channels?

Akhil: Both formats – advice and distribution may exist across multiple channels. Just as you have mentioned RIA practice for digital acquisition, we are also seeing increasing usage of RIA practice amongst private bankers. Partly, I think I have answered this question in my previous response, the market is big and opportunity size is even bigger – the answers lie in customer segmentation and segmented service offerings. All channels of distribution will co-exist and grow in their respective areas of competence. There is no reason to believe that traditional channels of distribution will be impacted by new channels of distribution in a major way anytime soon. Given the experience, in long run digital channels do have the potential to become very large with digitisation and as internet penetration happens deepens in future but then the market will also grow. I think it’s good for industry if market expands through innovation and new ways of distribution of products & services.

WF: With little room now available on incentivisation of any form to drive sales, AMC sales teams will need to re-orient themselves significantly. In what ways do you plan to win mind and market share from distributors going forward?

Akhil: A very good question, it is now up to sales leaders and sales managers to introspect their current way of driving sales and if at all the same will work in future? One thing is for sure, product proliferations will stop and engagements better be more qualitative and content led rather than new product led or commercial / contest / sales promotion led.
I feel sales managers will need to work hard in building their knowledge on markets/ products and its dynamics. This will need to be done by providing special training programs through professional trainers on an on ongoing basis. Self-reading and gaining insights on markets and forming views by reading internal and external data points and then transmitting the same in the market place would certainly create an edge. Sales leaders would also have to invest in building sales processes to engage in market place with focus and discipline to win mind share and keep recall in minds of distributors on top at all times.
In absence of pricing arbitrage, distributors will look out for a lot of value add by of content and then well-positioned products with consistent performances will be another key need. Hence it will be up to AMC sales managers to bring in value with meaningful content & communication along with having clear understanding of brand & product positioning.
Selling based on Brand – Performance – Pricing – Contests will not key requirement going forward, thus sales will be more a function of unique positioning of AMC and how its products can meet requirement of investor needs.

Courtesy: Wealth Forum

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