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Funds to Empower Sellers

Sellers/distributors will be better able to understand mutual fund products, thereby impacting investor needs positively

AMFI is looking to remove the biggest impediment in the way of investors across India, the shallow knowledge of its distributors and sellers. The agenda looks to ensure a pan-India presence.

With retail investor participation in mutual funds (MFs) being quite low, the MF industry is looking to regional markets to lure more and more investors and thereby widen the appeal of its products away from its dependency on major towns and cities.

The reason behind this may well be to tap a deep and abiding rural demand for products that has saved the Indian economy from logging very bad results. The market for financial products would definitely get deeper provided it is marketed well, and explained even better to people who are quite unfamiliar with such products, but who have managed to earn and save their way to a comfortable level of economic well-being and would now look to invest their money to get higher returns.

Catching the signal loud and clear, mutual fund industry has galvanized its efforts to better serve these areas by launching some investor-friendly features and facilities that would indirectly raise knowledge and empower in equal measure. Among the major steps is better communication with potential investors.

This is sought to be achieved by bringing in more competency amongst mutual fund advisers and distributors working in small cities.

The method picked up by the Association of Mutual Funds in India (AMFI), the representative body of Asset Management Companies (AMCs), is by introducing an online test for Mutual Fund (Advisers) in regional languages.

The proposed decision comes after AMFI received a host of requests for conducting the test in other languages. The step is welcome as just English and Hindi may not be able to convey the entire message regarding benefits and risks accruing from any investment product. The AMFI website, quoted its chairman A.P. Kurian, as saying that the first offering was in Gujarati which would be followed by Marathi, Bengali, Tamil and Telegu.

While examinations in Hindi are already on offer nationwide, in addition to English, AMFI has taken the initiative in a bid to help agents in small cities and semi urban areas to qualify themselves and be able to sell the products in a much better, informed, manner as it calls for in-depth knowledge to be able to appeal to an investor’s needs.

The module online was introduced with effect from June 8, 2009.

While the computer based test is conducted by NSE at its 6 centers, AMFI has mandated Indian Institute of Capital Markets (IICM) to conduct manual test.