Weldon Ashish Ji, Great work. We see so many ads on TV but rarely come a Mutual Fund Ads??? Testimonials of investors who got great returns will be open to public by AMC only with prior permission of investor and majority will be very very happy to share their great returns from Mutual Funds. We can see that Not a single AMC or AMFI or SEBI has any comment on such very very nice article, and they wants to expand business. Thanks for this platform.

Nice effort Ashish/Manish Ji. You have elaborated the the ground reality in details.

Very nicely explained .. You have done a lot of work explaining various concepts for IFAs by wriiting this. I agree with all the points . Specially the point 3a. We are actually struggling on this till date.

let us start form a simple 2 common application form for bulk and SIP so standard location of data is known. similarly it is also sy uggested that standard form for FMP can support physical nature of investment from post/ bank FD customers than running to AMC or net for form availabilty. This is being followed by UTI and SBI .Also huge national wastage of papers in form of fact sheet needs attention as IFA are using preprinted form and garbage balalnce as the fact sheets are minimum 30 days old .

Dear Ashish and Manish, Greetings! I agree all the points explained. In my opinion the mutual fund industry is over regulated and not investor friendly. An industry growth means prosperity to all stake holders. The truth is there is no stable performance in any schemes. Claw back of brokerage is a good step, but what about the investors who lost their capital over 75%? Today an investor called me and said, the market is at all time time, but his mutual fund investments of 2007 and 2010 lost over 40% capital erosion in absolute return term. Do we or the industry have an answer to those investors? Whether we are in T-15 or B-15.The trust is lost. Satyamev Jayate.

Just like what you said regarding common application forms etc. even the KYC acknowledgement under the new KRA must be common and not like what it is now taken from different POS.The best acknowledgement was when it was introduced only for MF and was given by CSDL which contained all the main details of the investor so it is easy for IFA or the investor to give the correct details. Second and the most important is that if there is some lapses on the side of AMC or Registrars they are answerable for the same. Here what happens is that once investor gets rejection he is held guilty and again has to go through all the process what he has completed before.Once this is controlled every thing will get smoother. Finally am personally of the opinion that to keep long term investment up front commission should be either nil. Only trial must be the priority and can be increased as the investment period increases. This will bring only serious IFA and distributors to remain in this field.

To increase retail participation, stories of successful investors should be brought forward to people. There can be columns in newspapers and shows on television in which these real life investors share their experiences of investing in mutual funds. As these real investors shall highlight the benefit of investing in mfs and the wealth they have created thru mfs, it will send positive message to masses and slowly people shall associate themselves with these investors.

One of the many challenges faced is lack of faith shown not only by new investors but even by those who have gained from these investments. Investors tend to stop fresh investment or liquidate their investments when they find even 20% absolute return on their investments with the fear of losing what they have gained. Investors do not believe that they can build serious wealth over long term thru mfs. The reason I see is that people do not find real life examples of investors who have remain invested for long periods and reaped the fruit of long term investing in mfs(unlike real estate where holding period may be in decades).

Good thought. The problem is the great minds in MF and SEBI do not think this way. They should know that concrete action is more important endless discussion. Congrats once again.

Very valid points raised by Ashish and Manish here, we have not been able to have a common form/ common process for all mutual funds in so many years, customer service of most of the funds is so pathethic that it is really putting off investors instead of bringing new ones, particpation and increase of retail clients should be encouraged, AMCs should be sensitive to client needs and difficulties, also be sensitive to the crucial link in the chain the IFA, only then we can have true financial inclusion in the MF industry which will help it grow. i congratulate Ashish on raising a very valid discussion which we all had been avoiding till now.

Very reasonable points. Also still there are many more bank branches in rural and city areas does not have ecs facility. Opening a new bank account for only for ecs? Even opening a bank a/c in our country is tedious. thanks

I think AMCs really need to look into these points with geat seriousness. Since the industry is all about long-term commitment, simple will to eschew short-term gains for long-term fruits on the part of all stake holders is what is required today. Though as distributors can create customer delight at our level, certain fundamental issues like standarsization of forms and procedures will save a lot of valuable marketing time for distributors and lot of avoidable heartburn for investors. Thanks to our brothers for such a well throught-out article...

There should be simplified common full proof process in all AMC"S right from KYC to death claim settlement/redemption/bank mandate change/change of address.Then only meaning full long term money will come in industry.New and old investor will enter again.Also IFA should be rewarded accordingly the new money from new investor he brings in.I am thankful to Ashishji & Manishji for putting their great full proof ideas for the growth of industry.

I fully agree with Ashish & Manish. We still have not been able to bring retail investments into MF. Why cant we have entry level schemes for new investor where we can atleast assure him of his Capital along with reasonable returns. Our counter part are miss selling Insurance like any thing.

In Every way the Entire article is very close to my heart. In fact I had suggested the same that you say in point 4 - Incentivise Distributors to take up IAP in a Big way.AMCs can come together to appoint a person to take charge of Investor Awareness Programs. Individual small time IFAs (like myself) cannot invest so much to conduct Investor Awareness. Incentivise IFAs who bring NEW CLIENTS irrespective of ticket size. Mutual Funds is the ONLY Solution for middle class.Unfortunately the Middle Class (even the educated middle class working in IT companies) is UNAWARE/Afraid to look at Mutual Funds. I can just go on but the above article says it ALL. A BIG THANKs to Ashish.

Dear Asish and Manish, Congratullations on your performance for such a long haul, its impressive. How ever , I am only surprised that , you still missed the single and largest problem thats plaugging the industry - The Upfront commission , and irrational pricing. The first and foremost thing to cleanse the wrong prctices in the industry would be to ban upfront commissions, along with bringing in uniform / transparant pricing for the trail for all categories of channels. In a way,the T15 /B15 concept itself is not correct.Its some what like , asking AMC to share the profit of the town dweller to the village dwellers non uniformly. That said , let us not add another illogical system called the retail / corporate classification. Full trail model will bring out seriousness in both distribution and the fund management , while thats the most cost effective model .Hence , lets all ask for full trail model as the way forward than these differential pricing models.

Ashish hit a lot of head on nails. If we can have cash payment upto Rs 50,000/- why cant we have HIGHER BROKERAGES ON SMALL SIPS upto Rs 25000/-. IT IS STRENOUS MENTALLY .PHUSICALLY chasing small cheques but when clients say thank you on meeting their finacial needs with this money, it makes it worthwhile. You know i love the entry barriers that have come up -banks will have lesser and lesser competition and we will be able to retire in peace playing golf ! The countries fiscal deficit will be funded by LIC and there will be no hedge to FII selling so we mutual fund agents / advisors have a contributory role to play.

Dear Ashish, Nice to have a candid exchange of views. As always, I am impressed with the clarity of your thought processes At edelweiss amc, we are re-looking at the way the industry has conventionally been approaching various issues. We have already seen opportunies and have implemented quite a few measures I am currently on leave but am expected in delhi soon. Would like to exchange notes on these initiatives in detail then

These are excellent thoughts raised by Ashish and munish. I hope in times to come we will actually benefit from these thoughts.God bless you Ashish and munish

Very well thought out article, the ideas are very good and I am sure will be considered positively by the AMC heads and SEBI. Congratulations to Ashish for presenting an article which highlights the grass root level problems and also gives solutions.

Excellent thoughts put forward by Ashish & team at DFDA. Many of these are so simple to implement but we try to complicate it further in the name of the processes. Retail Vs Non-retail is an excellent solution. Hopw AMCs / AMFI is listening.

I AGREE WITH POINTS RAISED BY MR.ASHISH. RIGHT INCENTIVE, SMOOTH OPERATIONAL PROCESS & INNOVATIVE WAYS TO RETAIN MF BUSINESS IS REQUIRED FOR THE GROWTH OF MF INDUSTRY. I AM ALSO IN FAVOUR OF HIGHER UNIFORM TRAIL INSTEAD OF UPFRONT+TRAIL. IT WILL BRING MONEY FOR LONGER PERIOD. AS GOVT INCREASED DA TIME TO TIME FOR THEIR EMPOLYEE TO NULLIFY THE EFFECT OF INFLATION IN THE SAME WAY MF INDUSTRY SHOULD REVIEW THE TER/INCENTIVE PERIODICALLY TO NULLIFY THE EFFECT OF INFLATION TO MF INDUSTRY PLAYERS.

Dear Mr.Ashih Goel , What better way to safe guard the interest of investors and long term distributors than only trail model model? As long as upfront commissions are there people who do business with short cuts(pass backs) will be there. Upfront commissions spoil people to go for easy choices that are detrimental for the industry in the longer run. As you are a long term oriented distributor, why dont you clarify yours as well as DFDA’s(as you are key member of it) stand on banning of upfront commissions?

Dear Ashish ji, i fully support your views and opinions..these are very useful inputs..

Dear Mr.Ashish Goel, Claw back reduced churning to some extent but it still doesn’t address the churning that happens just after one year in the form of portfolio re balancing. We all know that there are huge variations in commissions (especially in upfront format which is the root cause of churning) in the industry. Also, upfront commissions help non serious distributors whose only selling point is a pass back, in the process hurting the interest of honest and long term oriented distributors. The more and complex the number of rules to safe guard the interest of investors the bigger is the mechanism required to implement those rules. In reality complexity helps unscrupulous elements. Keeping it Simple is the Key. If we are here for long term, what better way to keep the investor and distributor interests aligned through trail only model? Why not ask for a ban on upfront commissions instead of asking for complex rules?

Really a very much interesting points must consider by AMCs to change the future of industry.

I fully support all the issues and opinions.

very good article Ashish Bhai........we are very positive abt the industrys growth as always......and these suggestions will really help us to grow more effectively

Very good article. It clearly lists out what AMCs can do without poiting fingures at anybody. When even most basic issues like common application forms and common back office procedures are not addressed by industry for several years, all talks of spreading MF to retail investors appears as just empty words.

Very vaild points!! Whats the difference between efforts when a distributor get Rs. 100000/- in MF from Jaipur or Rs. 100000 from Ajmer. Jaipur is T-15 and Ajmer is B-15. SEBI must rectify its B15-T15 policy. Also AMCs need to understand the colour of money. Rs. 1 crore one cheque invariably gets higher payouts to distributors than Rs. 1 crore made up of 100 cheques of Rs. 1 lac. AMC make more money in fragmented investment and distributors spend more. but payouts are less In case of one cheque of Rs. 1 cr, invariably distributor have to incur less cost but gets more... any explanations on this....

All the points are quite relevant and deserve AMCs attention. If I may add, multiple sips should be allowed thru one sip form and probably thru one cheque only.

Excellent, genuine, valid and utmost important points raised. I fully support all the issues and opinions.

Chiefs of AMCs, please hear this representation. Please save the distributor community, prefer IFAs, it should helps the entire industry. Because if Ull continue the RELATIONSHIP with IFAs, those walk with U in their entire LIFE, than Banks, NDs,& RDs. This is 100% TRUTH.

Very valuable inputs for any forward looking CEO