There are 60,000 mutual fund distributors in India despite substantial growth in the industry. The segment of Mutual fund distribution in India is outrageously under-penetrated where only one MFD is available to over 17,000 potential investors. Such data and statistics signal greater opportunity for Indian Mutual Fund Distributors. They just have to make themselves competent enough by making potential connections with the technology.
1. AUM is not growing, on top of that there is a continuous squeeze in distributors’ commission
Despite all the hard work, MFDs are not able to improve their client conversion rate and grow their AUM effectively. It is difficult for MFDs to accumulate a solid client base of clients.
The solution to the problem is automation, which means they need good Mutual Fund Software, which can help MFDs in providing services in accordance with the investors’ needs. E.g. generally Indians believe in saving money for depositors or keeping it idle. This idle money can be switched to MF schemes through advising highly liquid and risk-free MF schemes, where it can earn a little larger return with all the benefits of saving deposits in the bank. A good Mutual Fund Software for Distributors will offer some tools where their clients can make investments in highly liquid funds, which can be redeemed on a real-time basis.
2. The reduction or the cuts in the mutual fund distributors’ fee (squeezing distributors’ commission)
Generally, the impact of the cut in expense ratio should be shared between the asset management company (AMC) and the distributor. However, in practice, large AMCs seem to have largely passed on the cut to mutual fund distributors rather than absorbing it themselves. Small Mutual Fund Distributors have been hit the hardest.
In this situation, MFDs need to transfer their labor work to machines and software. An effective Best Mutual Fund Software will expedite, automate and streamline the daily firefighting activities of MFDs and provide them sufficient time to engage in developing their business.
3. Financial advisors are not embracing new ways to outreach clients
A CNBC article reported that 54% of their respondents feel better communicating with clients using technology. However, financial advisors are still falling short of integrating more techs into their processes. With the help of new tools, one can easily automate tasks to get their hands free and then work more on their clients.
Digital on-boarding and KYC process of clients
Automated tracking and reporting
Developing a solid working relationship with clients.
To achieve multi-fold growth, MFDs need a system, and efficient Mutual Fund Software to keep track position, performance and progress of your clients, and your business.