How is the increasing proliferation of direct plans and the new age platforms changing the dynamics between the three key stakeholders - the investors, the distributors, and the manufacturers (AMCs)?
Technological advances in new-age tools like AI, internet of things, data devices, mobile technology, blockchain, cloud technology, payment gateways, etc., accelerated services and product deliveries for banking, financial services, insurance, broking. The pandemic only pushed the adaption and adoption of technology in the mutual funds, insurance and broking industry. Each of the stakeholders, investors, distributors and manufacturers, realised the immense benefits though working from home (WFH). Fintech proliferation across the IT spectrum saw added interest by investors and several tapping the capital markets for business scaling. It's estimated that over 800 companies, world over, achieved sizes exceeding a billion dollar and there were thousands of start-ups. It now appears that this is an irreversible phase and new-age organisations can potentially be the biggest disruptors of conducting businesses and providing investment opportunities, too.
In the AMC industry, both T30 and B30 continue to witness an increase in transaction volumes. While MFDs (mutual fund distributors) and other distributors are also adopting technology for retail markets, direct plans saw the adoption by large investors like family offices, UHNIs (ultra-high-net-worth individuals), institutions. The launch of passive funds has only pushed informed investors to opt for direct plans. In the near to mid-term, we feel that a hybrid mode of regular and direct plans will co-exist until financial-product awareness increases manifold.
Many people these days take to equity investing by owning the stocks directly. Innovations like smallcase are further catalysing this trend. What implications do you see on the businesses of mutual funds? Can they pose a challenge to the growth story you would envision for the fund industry?
First-time equity investors, aided by technology and new-age manufacturers, perhaps are an outcome of the pandemic-led WFH mode and near-zero interest rates and accommodative stances of several countries to spur the global GDP growth. Continuance of belief in pro-risk assets will only increase the market size - be it direct stocks or mutual funds. The pandemic, in fact, has expanded the capital-market size, which we feel is irreversible. History shows that excessive risk and consequent losses lead to accelerated growth in the mutual fund industry.
- Investment guru/manager you admire the most: Both Indian and global investors and advisors have influenced me.
- Business leader you'd like to emulate: Within our industry, there are quite a few who increased my knowledge of global markets.
- The most rewarding financial investment you've ever made: Abiding by SIP, a tactical allocation to select sectors, global investments riding the G-sec curve.
- Money mantra you swear by: Asset allocation and investment discipline, with the primary aim of wealth generation for at least the next generation.
- If not a money manager, you'd be: I would like to be a strategist and reach out to millions of un/ill-informed investors who strive to uplift the lifecycle and aspire to be wealthy.