The roadmap would be to channelize the large pool of savings which have gone into the unproductive asset classes such as gold or real estate into equities, says A Balasubramanian, CEO & MD, Aditya Birla Sun Life MF and Chairman, AMFI.
You have been appointed Chairman of AMFI. How will you now find time for friends and family with two positions?
Trying times. Of course, I was chairman of AMFI earlier also and I was also driving our business and unfortunately I could not spend a lot of time both for the AMC as well as for the industry. At that time the entire programme of mutual funds was introduced. The industry board members had the confidence in me picking up this responsibility once again as a chairman.
Some of the other members are also eligible to take this position but for their own personal reasons, they could not take up the responsibility and therefore I took the responsibility of being the chairman of AMFI on the basis of AMFI board request. Somehow I made it work. Taking the extra time in the interest of the industry and the larger pool of investing community in the country I do not have any problem per se.
Mutual fund Sahi hai campaign was in a sense launched during your tenure as the AMFI Chairman. What is the new thing which you are now planning to do?
Clearly the roadmap would be to channelize the large pool of savings which have gone into the unproductive asset classes such as gold or real estate into equities for investors so that the financial savings start generating some return for them. It is the way of building wealth or any income generation opportunities which will then provide a greater platform and bring more customers on board.
Currently we have only about 2.6 crore unique customer base. Though this is five times higher than the number, the next approach would be how to increase the customer base. Ultimately, mutual funds provide solutions on a product and therefore mutual funds can act as a single stop solution for every needs of the customers. Arriving at that point would be the key for the next journey which includes fund of funds, fixed income schemes along with equity investing for long term wealth creation.
Up until now we have seen a phase where distribution and brands were the two factors which were responsible for the growth of the mutual fund industry. But now there is technology, innovation and ETFs. How is AMFI viewing this change?
There is a wave every 10 years. In the last 10-15 years, the growth of the industry has come on the back of a huge amount of work that has been done by the AMFI. Everyone has to recognise the change that is happening with both ETFs and online platforms coming in. I see a large component of the mutual fund growth coming through distribution and as the wallet share of every investor starts rising, they need more hand holding, more personal discussions, conversations and so on and so forth. Therefore the dominant component of the mutual fund would continue to come through the distribution channels.
ETFs are complementary solutions rather than products that take care of the total need of the customers and being fair to the customers in providing a total solution irrespective of whatever is the cost of the product or irrespective of what remuneration one may get in the product. I am sure all will go hand in hand. As the wallet share of the customer increases, there is a huge need for somebody to advise them and it cannot be technology. Personal ties would remain a large component.
