The Road Ahead for the Mutual Fund Industry
Serving the Mutual Fund industry for over 2 decades as trusted solutions partner, CAMS had the opportunity to present aspects of the road ahead for the industry at the ASSOCHAM 14th Mutual Fund Summit 2015 held recently at New Delhi. President and CEO, Mr. N K Prasad spoke on ‘Çhallenges of the Mutual Fund industry in reaching out to retail investors’.
Currently there are more than 8 crore mutual fund accounts and the industry is a promising one. There has been considerable wealth generation in the last decade, with investors who have reaped more than fifty times their initial investment. These factors, Mr.Prasad pointed out, showed the opportunity that is there in the industry. While the mutual fund industry in China is 25% of the country’s GDP, in India it is relatively lesser. Under such a scenario, a big opportunity still exists to be tapped by the industry but still remains a challenge.
Putting forth ways to address these challenges, Mr.Prasad stressed on the imperative need for investor awareness programmes from the industry. While the industry puts aside 2 basis points of their Assets under Management towards investor awareness programmes, it would be more effective if such communication is done in a cogent manner.
Mr.Prasad also highlighted the need to use technology effectively and mine investor data that is readily available. With proper analytics, it is possible for the industry, he said, to get a larger share of investor wallet. The other key aspect Mr. Prasad was the role the distributors and advisors play in the industry. By bringing technology to end point devices, it is possible to more effectively use distribution channels like banks, post offices and business correspondents to widen the reach of mutual funds. With the increasing density of smart phones, investing in mutual fund is becoming all the more convenient.
CAMS, as a key partner to several AMC’s continually strives to contribute to the growth of the mutual fund industry.