mf industry : emerging trends , outlook & ifa business 27 th aug 2014
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MF Industry : Emerging Trends , Outlook & IFA Business 27 th Aug 2014. USD 29 Trillion. Global Overview : Mutual Funds. Size of Mutual Funds Globally !!. Global Scale & Depth of MFs is Inspiring !! - PowerPoint PPT PresentationTRANSCRIPT
Confidential
MF Industry : Emerging Trends , Outlook & IFA Business
27thAug 2014
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Global Overview : Mutual Funds
Global Scale & Depth of MFs is Inspiring !! India on the right track but long way to go ...currently only 0.5% on Global MF Industry , Equity Share < 30%
Size of Mutual Funds Globally !!
Growth of global MFs in last 20 Years
Contribution of Equities to global MF
Assets
Data Source -ICI Global Research Perspective Mar'14 Vol.1 No.1 . Data as on 2013
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MF assets as % of GDP : A big indicator !
In Evolved markets , MF Assets have exceeded ~ 50% of countries GDP .
India still at ~5% has huge growth potential
Global Overview : Mutual Funds
Data Source -ICI Global Research Perspective Mar'14 Vol.1 No.1 . Data as on 2013
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Year - 2004
Year-2014
50X - 49% CAGR
5X - 17% CAGR
30X - 42% CAGR
10X - 20% CAGR3X - 10% CAGR
Indian MF Industry- Long-term trendExpanding Horizons-Deepening Roots
Source- SEBI/AMFI (AUM-EOP-Jul’14)
Most of growth happened during 2004-2008 .. Last 5 years have been stagnant
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Growth Phase of MF Industry
Investor G
rowth
(in C
rs) Total
AUM
Total AUM
Total AUM
Fixed Income
Fixed Income
Fixed Income
Equity AUM
Equity AUM
Source- SEBI/AMFI
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After a decade of diverse phases , Industry on the fast-track 20 Lac Crs by 2020 : 2X (15% CAGR) much realistic expectation
Projections
Overall AUM Growth & Potential
10X - 25% C
AGR Gro
wth
Indian MF Industry- Long-term trend
Source- SEBI/AMFI
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Flows in to Equity MFs : a Rejoinder ! Equity flows back on track .. Will be the biggest growth driver Recent flows similar to that of 2007-08 bull-run peak Considering this is just the beginning of a mammoth , long-term bull-run , 2 Lac Gross Sales annually seems realistic by 2020
Proj
ectio
ns
Indian MF Industry- Long-term trend
Source- SEBI/AMFI
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Retail Burst & Growth in Investors Retail participation is picking up fast after a lull of almost 5 Years (Ref Investor Category
Trends) , Total Investors expected to touch 10 Crs by 2020 After 5X growth in last 10 years , 3X growth in next 5 years very realistic expectation
Projectio
ns
Indian MF Industry- Long-term trend
Source- SEBI/AMFI
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Exponential Growth in SIPs & related Equity Inflows SIPs will remain the main tool for new customer acquisition -Goal-planning approach will help deepen existing book ATS moved from ~1000 to ~2500 in 10 years. Expected to touch ~5000 by 2020 . SIP-Equity Inflows expected to touch Rs.7500 Crs a month New SIPs Already touched 3 Lacs P.M (Peak was 4 Lacs P.M)
Proje
ctio
ns
Indian MF Industry- Long-term trend
Source- SEBI/AMFI
Projections
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Indian MF Industry-Short Term trendEarly trends encouraging ! Industry poised for Quantum leap ! Gross & Net Sales Trend : Mar’13 to Jul’14
Tre
nd
Rev
ersa
l !
!
Equity moving fast from Net –ve last FY to Net +ve in Apr-Jun Qtr
Equity Avg. Gross Monthly Sales have more than tripled from ~3500 Crs for last FY to close to ~12,000 for Apr-Jul’14 Period
Last entire year sales covered in just 4 months this FY… Net Sales YTD is 13573 Vs -13158 for last FY
Source- SEBI/AMFI/CAMs MFDex
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Indian MF Industry-Short Term trend
Source- SEBI/AMFI
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IFA Share has marginally gone up over last 2 years from 37% to 40%
IFA Channel business-share Trend
Source- SEBI/AMFI/CAMs MFDex
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IFA Business : Gross/Net Purchase Share
IFAs contribute 30% of Industry gross sales on Equity side and 15% on the Debt side
Concern - IFA Purchase Share (Gross/Net) very low compared to AUM Share Source- SEBI/AMFI/CAMs MFDex
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IFA Channel business-share Trend
Source- SEBI/AMFI/CAMs MFDex
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Industry is growing ! Are you ???IFA Business Model
ARN series upto 30,000 & ARN series 80,000+ dominate the space Re-iterates the fact that old IFAs who evolved with time & new
generation IFAs keep growing business
Source- SEBI/AMFI/CAMs MFDex
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How to capitalise this growth…
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Need for building dynamism..
IFA Business Model
17
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Needs to get a facelift
Transformation required from current model & approach Possible with continues skill & efficiency enhancement
IFA Business Model
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Be the “Banker” to your customer !!!! Be the “House-hold banker” to your customers
and provide 360 Degree Solution
IFA Business Model
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Tapping salaried work-forces @ work-sitesIFA Business Model
Large number of salaried employees in India remain under-advised for their personal financial needs
Need to have structured approach to tap these potential customers Salary-deduction-based products can fuel the growth in this segment
Indian Railways 14 Lac Employees
Indian Armed Forces
13 Lac EmployeesSBI
2.22 Lac Employees
Infosys1.6 Lac Employees
Reliance Group1.2 Lac Employees
Tata Group4.25 Lac Employees
Wipro1.46 Lac Employees
PNB63,292 Employees
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Our Business Enablers
What is RMF doing ……
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Products @ Reliance MF
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Need for technology adoption
Apr-Jul’14 saw New Customer addition improved in critical segments ,Retail (Affluent) & HNI Category fastest growing segments adding ~5 Lacs New Investors
Retail investor-base depleted over last 5 Yrs due to lack of service & advise !! Need to adopt technology for service and continuous engagement with customers
Source- SEBI/AMFI/CAMs MFDex
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“Digital” driving financial services transactions
• IAMAI estimates >200 mn internet users in India which is 10 times more that population of Australia!!
• India to cross Internet user population of USA and will be the 2nd biggest Internet User country after China
% of urban population digitally equipped
% population < 2.4 lakh 2.4-7.2 lakh >7.2 lakh
44+ 1% 5% 16%35-44 4% 12% 23%25-34 7% 23% 32%18-24 14% 25% 46%
Annual household income (INR)
Mutual Funds, online penetration is only 4%
Online transactions are increasing with CAGR of 35%
MF target investor segment will have 20 mn. Digitally
enabled investors by 2016
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Technology Adoption @ Reliance MF
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THE FIRST EVER ONLINE PORTAL FOR RMF PARTNERS
A major leap in our constant endeavor to enhance our product suite, service and over all Partner experienceA major leap in our constant endeavor to enhance our product suite, service and over all Partner experience
Now all of these can be addressed by a click of a button
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Business Easy – Core Functionality
27
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Distributor Initiated Transaction
4
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The eLearning EDGE
Online mini courses Animated Courses Video Courses
Game based learning Quizzes / Assessments Page turners InductionInduction Case
studyCase study
MotivationalMotivational
Life skillsLife skills
Technical skills
Technical skills
Exclusive for partners registered on Business Easy Portal-www.rmfpartners.com
Exclusive for partners registered on Business Easy Portal-www.rmfpartners.com
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Industry will grow….its time to multiply your efforts ! Overall external environment most
conducive for exponential growth
Investor will remain at the core of the business model
Expand Business Domain :- Deepening Relationship value from
existing customers Enhance business breadth by New
customer acquisition/ worksite models Continual Self-Enhancement is a must
Skill-set & Knowledge development Adopting best-in-class practices
Use of innovative mediums & approach For Investor Awareness For Sales /Online Conversion For ongoing communication &
Servicing
Synopsis
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Believe in your convictionInspired by true story on 27th Dec 1975, the ‘Chasanala’ Coal mine in Bihar got flooded with water in which 572 workers were caught. It is an intensely dramatic film about the human heart; that as long as it beats with love and with hope, there will always be a dawn waiting at end of the blackest of nights and you must always believe in your own conviction !!
Paani yahi par hai ! Abhi dikh nahi raha… Jab
ayega tab tayar rehna !
Thank You
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Significant increase in New SIP numbers since Feb’14 onwards .Growing SIP numbers indicate confidence of retail-investors coming back to equities
Current SIP Penetration to total MF Retail investor-base (3.5 Crs) is 15% . Just by increasing it to 50% will take us to 1.5 Cr live SIPs. That culminates to SIP inflows of ~7500 Crs Per Month / Rs.60,000 Crs Per Annum !!!
Indian MF Industry-Short Term trend
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1SIP Investor : 3 years
Long Term Revenue for 3 years Sustained and incremental growth Reduces the risk of investor dropout
1 Family = 4 SIPs
Acquisition Through SIP : Family Harvesting
Family Harvesting
IFA Business Model
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IFA Business Potential
July 2014July 2014
July 2015July 2015
2X Activation
2X Activation
4X New SIPs
4X New SIPs
5X Inflows
5X Inflows
5X Inflows
5X Inflows
Just by doubling the number of active IFAs can enhance business exponentially
Back
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Investor Category Trends- AUM
Mar’13 Mar’14
Apr-Jun’14 Qtr shows steady growth across Investor categories Retail (Affluent) & HNI Category are the fastest growing categories which is a very encouraging ,
especially after a stagnant last FY . HNI Category will be the next growth driver Corporates still dominate the MF Industry with almost 50% Share
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Introducing First-of-its kind, a 360o Embedded Financial Advisory
Solution empowering investors with customized integrated financial
solutions to “Achieve Financial Goals through Right Planning”
Facilitating investments in a systematic manner by diversifying across
equity, debt and gold asset classes
Introducing First-of-its kind, a 360o Embedded Financial Advisory
Solution empowering investors with customized integrated financial
solutions to “Achieve Financial Goals through Right Planning”
Facilitating investments in a systematic manner by diversifying across
equity, debt and gold asset classes
Reliance Portfolio SIPReliance Portfolio SIP
Embedded Financial Planning Solution through SIPEmbedded Financial Planning Solution through SIP
Enjoy the benefit of diversifying across different asset classes in just Rs 5000!
Reliance Portfolio SIPReliance Portfolio SIP
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Reliance Portfolio SIP –Answers for all your customer’s questionsReliance Portfolio SIP –Answers for all your customer’s questions
“Customer for Life” Concept Once your customer , Always your customer !!!
Your ARN hard-coded with the SIP Mandate
Long-term Revenue Opportunity from High Trail
Dynamically manage investments in all environments
Ability to charge fees to customer
A win win situation for you and your investors!
Reliance Portfolio SIPReliance Portfolio SIP
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Reliance PSIP vs Single SIP
39
Investments Single Scheme SIP Portfolio SIP Approach to investments Product Oriented Goal Oriented
Assessing Individual's Risk Profile
Not available Available
Investments across Asset Classes
Not possible Possible
Financial Advisory Not possible PossibleCustomization of Portfolio Not possible Possible through Recommended
option or Investor's Choice optionDiversification Manual Automatic Meeting varied financial goals
One objective met through one scheme investment
Objectives such as Wealth Creation (equity), Regular Income(Debt), Idle Cash Management (Liquid) & Gold Accumulation (Gold)
Convinience of investing Multiple Mandates Single Mandate for multiple schemes
Documentation High Low Reallocation Not possible One can carry out the change in asset
allocation as well as change in the schemes
Account Statement Multiple scheme wise Single Consolidated Goal Oriented
Reliance PSIP - A New Thought to Asset Allocation
Reliance Portfolio SIPReliance Portfolio SIP