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'The experience and wisdom of the distributor cannot be replaced by a platform'

Sandeep Bagla, CEO, TRUST Mutual Fund, answers questions related to key industry issues

'The experience and wisdom of the distributor cannot be replaced by a platform'

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)?
The great thing about Indian markets is that it is constantly growing and there is room for everyone. Distributors analyse, advise and allocate funds for their clients. Platforms will add to the reach by getting new investors into the mutual fund fold by making investment easy for the tech-savvy, retail investors who are not being serviced by distributors. It would be erroneous to think that one will grow at the cost of the other. Investors will have more tools to get the information through the platforms. However, the experience and wisdom of the distributor cannot be replaced by a platform. I think all the four stakeholders - investors, distributors, AMCs and the platforms - will coexist and grow happily ever after.

The precipitous fall in interest rates has spelt big trouble for regular income seekers. Do you think the fund industry can better serve this investor segment and in a cost-effective manner? What's your big idea to solve the investors' income problem?
Interest rates remain broadly in a range, while inflation jumps around from sometimes negative to double digits at other times. If one were to see the fate of income seekers over a long period of time, it would be fair to say that they have been compensated adequately over inflation. I am not in favour of advocating high-risk-taking through the fixed-income route, as that part of the portfolio stands to provide stability. Markets are cyclical in nature and one must wait for each asset class to perform. The big idea is to remain invested in markets across equities and fixed income in a balanced way with the help of some expert advice!

Rapid-fire questions:

  • Investment guru/manager you admire the most: People with conviction like Warren Buffett.
  • Business leader you'd like to emulate: Uday Kotak, who has created a low-risk, high-return financial conglomerate.
  • Money mantra you swear by: Leverage is your enemy.
  • If not a money manager, you'd be: A financial journalist.