Need to incentivise mutual fund distributors to reach 90 crore potential investors, says Rohit Chawda, Taurus MF

Ease of transaction, awareness and robust distribution networks are essential to boost the mutual fund industry in the country whose population stands at around 140 crore, according to Rohit Chawda, Acting Chief Executive Officer, Taurus Mutual Fund.

At the sidelines of Mutual Fund Summit 2023 organised by Assocham, Chawda said there is a need to incentivise distributors. Frequent changes, holding mutual fund distributors (MFD) brokerage on account of many counts have greatly disappointed. “I feel that the industry body should come forward and work on giving solutions to MFDs. No one is representing distributors. Whenever I go to distributors most of them do not show any interest in selling mutual funds. Some of them prefer to sell insurance or other investment instruments,” he said adding AMFI is not doing much for the growth of mutual funds.

He further said that advertisements on television or OTT by AMFI related to ‘Mutual Funds Sahi Hai’ are mostly watched in metros. “Who is watching these advertisements in smaller districts,” Chawda said.

He believes that there is a need to do daily shows on the radio. “You need to advertise in regional newspaper or other regional media to popularise mutual funds in beyond 30 cities,” the market watcher said in an interaction with Business Today.

The money manager with three decades of experience further said there is huge liquidity among beyond 30 regions. But people are not aware of mutual funds. India has close to 90 crore potential investors and without a robust mutual fund distribution system reaching out to them seems not an easy task.

“People in metros like Mumbai and Delhi have thousands of advisors. But advisors are not available in smaller towns. AMFI should work on increasing the number of advisors,” he said adding the mutual fund body is too active in disincentivising distributors.

“There is a need to understand the problems of distributors and also spend some money on such issues,” he said.

While sharing his views related to the ground levels in Orissa and even in Gujarat, Chawda said people living in smaller districts still do not know about mutual funds.

He further said that India has just 3.5 crore unique investors at a time when there are 75 crore PAN card holders and 90 crore Aadhaar card holders are there in the country.

“There is a huge potential to increase mutual fund business. You need to strengthen the distribution network by proper recognition and encouraging youth to be MFDs ,” he said adding assets under management of the mutual fund industry can multiply with the help of ease of transaction which is missing. At present, the AUM of the mutual fund industry stands at over Rs 41 lakh crore.

“I believe there is a potential to reach AUM of Rs 140 lakh crore by 2047,” he said while maintaining a bullish view of the Indian equity market.

“Domestic equity market is very strong. This is a story of consumption because of our population. India’s robust consumption pattern will surely continue to attract foreign money,” he said.