Notes from the AMFI Mutual Fund 2018 Summit

The guest post below has been written by well known and highly respected Pune Financial Advisor Sanjay Rao. He can be reached at  9673895854 or

I had an opportunity to attend the AMFI Mutual Fund 2018 Summit on Aug 23,2018 in Mumbai.

The theme of the event of #ThinkDigital .

The opening address was given by Mr A Balasubramanian, Chairman , AMFI

He gave a brief on the industry outlook. A presentation was shown on the Mutual Funds Sahi Hai campaign.

Key Takeaway points:
1>Two years ago, if you were speaking to someone and you said mutual funds, that person would complete it by saying – mutual funds are subject to market risks. But now they complete it by saying – #mutualfundssahihai
2>The next wave of growth in MF industry may be led by retailing of debt schemes…be ready…AMFI showcased their new investor awareness campaign.. “Mutual Fund Fixed Income schemes mein bhi FD wali baat hai “
3>47% of the record 16 million individual folios added during FY2018 were SIP accounts

The next speaker was Mr Deepak Parekh, Chairman of HDFC . It was a pleasure to see him in the flesh

He highlighted everything that he thought was wrong with the industry and along the same lines mentioning how much more growth can be achieved

Key Takeaway points:
1>Doubling the Assets under management in 5 years
2> To do away with providing incentive to distributors by taking them to foreign locations under the pretext of training. He said this was more prevalent in the Insurance industry and should be curbed.
3>The AMCs should rationalise the cost structure
4>The advisors should be well trained in order to prevent misselling
5> Bad financial decisions are made in good times so the industry should grow prudently and not irrationally
6> Diversification . The MF industry should hire more women

Then the keynote address by chief guest, Shri Ajay Tyagi, Chairman , SEBI
He expressed concerns over the growing concentration of assets under management (AUM) among the top seven players and emphasized on the need of having more competition to ensure uniform growth among industry players.

Key Takeaway points:
1>He commended the industry for achieving stellar growth over the last few years, but added that the Indian mutual fund AUM to GDP ratio continued to be lower at 11 percent of GDP as compared to global average of 62 percent
2>Risk management – Debt funds have to be more vigilant about the risks they are taking and how these risks are being valued.
3>Promote direct plans- He stressed that AMCs should promote direct plans more actively in investor awareness campaigns.
4> MFs must go to smaller towns

The next speaker was Dr Uma Shashikant, Chairperson ,CIEL who spoke via a video call from the USA

She compared the USA mutual finds with that of India and so to why the penetration was so much over there.

Key Takeaway points:
1>One of the reasons being that American investors because mutual funds are offered as part of retirement plans (401k plans). Unless Indian govt nudges Indian investors, cultural barriers favoring deposits will remain in place
2>It is important to build products that suit investor preferences like ‘retirement funds which keep changing asset allocation as the investor reaches closer to goal’

Post this Ms Usha Thorat, Former Deputy Governor ,RBI spoke on strengthening the Indian Debt market.

Quite an intelligent talk. She spoke in depth of debt bonds and the need for fund houses to monitor companies besides rating agencies

We had an hour lunch break where we could network with other IFAs

Post lunch was a Panel Discussion- Leveraging Digital for Intermediation with
Mr Anuj Kumar, CEO, CAMS
Mr V Ganesh , CEO , Karvy
Mr Ramesh V, CEO, MF Utility
Mr Neerav Kaushik , VP, Franklin Templeton Services(India)

A very good discussion on what being really Digital Digital means.

Taking money out of an ATM machine, POS counters where still you have to interact with physical intermediaries are not totally digital.

Spoke on how much more awareness needs to be made for IFAs to go digital
Out of 157 crore banking transactions only 5 crore through complete digital mode..Are we really digital? A great point brought in by V Ganesh

Next was the most dynamic sessions of the day ,Leveraging Technology for the next phase of growth by Mr Vijay Shekar Sharma, Paytm

The amount of energy and enthusiasm that he showed made us come out of our post lunch slumber and the crowd couldnt have enough of him

He was talking of how disruptive Paytm was going to be to the MF industry

Key Takeaway points:
1>He said -we want to become the wealth advisor to the auto rickshaw guy and a shopkeeper. If the auto guy earns extra Rs 500 on a certain day, we want him to pick up the phone and in 3 clicks invest it. I’m sure a lot of the IFAs were squirming in their seats despite a smile on their face.
2> He wanted promote zero based commissions funds with real time access to CKYC, Subscription and on the spot redemption. The points he made seemed logical but pointed he knew the regulators would have their own take on this
3>The country is not in English. It’s a good idea to give mutual fund statements in regional languages. Making them digital would cut costs and trees too.He gave very good examples of how Paytm was achieving all this.
4>The most amount of gold was sold on Paytm.
5> At the QnA when an IFA asked how can one invest in a MF by 3 click with no knowledge, he gave comparisons on how one wouldnt buy a shirt online cause the feel,style,fitting cannot be physically seen. Well now most of the online buys are in fashion. There will be disruption whether we like it or not. I’m sure the way he spoke,the energy and the Paytm accomplishments would give most of the IFAs a true sense of whats coming.
6>Paytm is the largest seller of Hero bikes in the country, even more than the distributors and here we are talking about something intangible asset like MF.
One of the best sessions of the day

The next panel discussion was Leveraging Digital for Intermediation – The Key to Customer Expansion
Mr Rajiv Bajaj, Bajaj Capital
Mr Jignesh Desai, NJ India
Mr Hemant Rustagi, WiseInvest Advisors

Key Takeaway Points:
1>Mutual Fund business is also psychological and needs tech plus touch – Rajiv Bajaj
2>If the mutual fund industry needs to double AUM, we need minimum of 5 lac advisors onboard – Jignesh Desai,

Contrary to what Vijay of Paytm was saying ,Hemant and Jignesh were talking on how important the role of an advisor was.

When people do a 3 click investment they are actually agreeing to knowing what the product risk is — but do they really.

The final Panel Discussion of the day with some of the veterans from the Mutual Fund Industry to discuss The Way Forward with moderator Tanvir Gill of ETNow :
Sanjay Sapre, President, Franklin Templeton MF
Kailash Kulkarni, CEO, L&T MF
Swarup Mohanty, Mirae Asset MF

They were generally talking on the MF trends and how important it was for an advisor to do their due diligence for the client as its the name of the entire industry/fraternity at stake and not just the advisors.

Headed back to Pune after a well worth time spent.

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