The 28% of the IFAs said that this led to an increase in income (15%) The 72% report a decrease in income compared to the past. Incidentally, the IFA business is still attracting new comers and 5% of the IFAs surveyed have joined the business in the last two years.
Cafemutual IFA study reveals that though IFAs have deep conviction in the merits of mutual funds from the investment point of view, they are anxious about the future because they perceive the regulator as being unconcerned about IFAs’ views and voices.
Two years after the ban of entry load, most IFAs, who sell multiple financial services products, still earn maximum from mutual funds (except in south) but have witnessed wide fluctuation in their incomes and they need all the help they can get from the Mutual Fund industry and regulator SEBI to move to a more client centric model where they are able to charge their clients.
Another significant finding was that most IFAs do not undertake marketing and business development activities. Restricting their catchment area to their social network, they expect their growth to come from their existing clients – either through repeat business or referrals. About 70-90% business comes from references. Most IFAs focus on selling equity funds only and there has been only a marginal shift into non-equity categories.
Mr. Prem Khatri, Founder & CEO, Cafemutual.com, says, “The first-of-its-kind comprehensive Cafémutual IFA study provides some interesting insights on the IFA community. While in the past, inflows would dry up completely in market downturns, today we have an estimated 80 lakh SIPs (Systematic Investment Plans) running, most of them being brought in by IFAs. Also, the industry has a huge opportunity in tapping the retail money that is currently being put in bank deposits and small savings. Maintaining income level is the key concern of IFAs at this point of time and this can be done if they build up their marketing capability. While the onus is on the IFAs to adapt and progress under the changed circumstances, they need all the help they can get in making a smooth transition.”
About Cafemutual..!
Cafemutual is a meeting point for all mutual fund professionals. Its focus is on the people engaged in the business of mutual funds – everyone involved in the chain of manufacturing / distribution of mutual funds. The content is oriented towards the mutual fund professional and not the investor.
Cafemutual has been founded by Mr. Prem Khatri who has been involved with mutual funds (Kothari Pioneer), banking (SBI, Bank of Baroda), wealth management (ASK Raymond James) and broking (Motilal Oswal). He holds a PGDM from IIM, Bangalore. A dedicated 5 member team ensures that the content on cafemutual is complete, relevant and presented in the right context.
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