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MF Industry : Emerging Trends , Outlook

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MF Industry : Emerging Trends , Outlook & IFA Business 27thAug 2014 – PowerPoint PPT presentation

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Title: MF Industry : Emerging Trends , Outlook


1
MF Industry Emerging Trends , Outlook IFA
Business 27thAug 2014
2
Global Overview Mutual Funds
USD 29 Trillion
Size of Mutual Funds Globally !!
Growth of global MFs in last 20 Years
7 Times
Contribution of Equities to global MF Assets
50
  • 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 lt 30

Data Source -ICI Global Research Perspective
Mar'14 Vol.1 No.1 . Data as on 2013
3
MF assets as of GDP A big indicator !
Global Overview Mutual Funds
  • In Evolved markets , MF Assets have exceeded
    50 of countries GDP .
  • India still at 5 has huge growth potential

Data Source -ICI Global Research Perspective
Mar'14 Vol.1 No.1 . Data as on 2013
4
Indian MF Industry- Long-term trend
Expanding Horizons-Deepening Roots
Year-2014
Year - 2004
3X - 10 CAGR
10X - 20 CAGR
30X - 42 CAGR
50X - 49 CAGR
5X - 17 CAGR
Most of growth happened during 2004-2008 .. Last
5 years have been stagnant
Source- SEBI/AMFI (AUM-EOP-Jul14)
5
Growth Phase of MF Industry
Total AUM
Investor Growth (in Crs)
Fixed Income
Total AUM
Fixed Income
Equity AUM
Equity AUM
Total AUM
Fixed Income
Source- SEBI/AMFI
6
Overall AUM Growth Potential
Indian MF Industry- Long-term trend
  • After a decade of diverse phases , Industry on
    the fast-track
  • 20 Lac Crs by 2020 2X (15 CAGR) much realistic
    expectation

Projections
10X - 25 CAGR Growth
Source- SEBI/AMFI
7
Flows in to Equity MFs a Rejoinder !
Indian MF Industry- Long-term trend
  • 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

Projections
Source- SEBI/AMFI
8
Retail Burst Growth in Investors
Indian MF Industry- Long-term trend
  • 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

Projections
Source- SEBI/AMFI
9
Exponential Growth in SIPs related Equity
Inflows
Indian MF Industry- Long-term trend
Projections
  • 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)

Projections
Source- SEBI/AMFI
10
Indian MF Industry-Short Term trend
Early trends encouraging ! Industry poised for
Quantum leap ! Gross Net Sales Trend Mar13
to Jul14
  • 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-Jul14 Period
  • Last entire year sales covered in just 4 months
    this FY Net Sales YTD is 13573 Vs -13158 for
    last FY

Trend Reversal !!
Source- SEBI/AMFI/CAMs MFDex
11
Indian MF Industry-Short Term trend
Source- SEBI/AMFI
12
IFA Channel business-share Trend
  • IFA Share has marginally gone up over last 2
    years from 37 to 40

Source- SEBI/AMFI/CAMs MFDex
13
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
14
IFA Channel business-share Trend
Source- SEBI/AMFI/CAMs MFDex
15
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
16
How to capitalise this growth
17
Need for building dynamism..
IFA Business Model
18
Needs to get a facelift
IFA Business Model
  • Transformation required from current model
    approach
  • Possible with continues skill efficiency
    enhancement

19
Be the Banker to your customer !!!!
IFA Business Model
  • Be the House-hold banker to your customers and
    provide 360 Degree Solution

20
Tapping salaried work-forces _at_ work-sites
IFA Business Model
Indian Railways 14 Lac Employees
Indian Armed Forces 13 Lac Employees
Tata Group 4.25 Lac Employees
SBI 2.22 Lac Employees
Infosys 1.6 Lac Employees
Wipro 1.46 Lac Employees
Reliance Group 1.2 Lac Employees
PNB 63,292 Employees
  • 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

21
Our Business EnablersWhat is RMF doing
22
Products _at_ Reliance MF
23
Need for technology adoption
  • Apr-Jul14 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
24
Digital driving financial services transactions
  • IAMAI estimates gt200 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

MF target investor segment will have 20 mn.
Digitally enabled investors by 2016
of urban population digitally equipped
Annual household income (INR)
population lt 2.4 lakh 2.4-7.2 lakh gt7.2 lakh
44 1 5 16
35-44 4 12 23
25-34 7 23 32
18-24 14 25 46
Mutual Funds, online penetration is only 4
Online transactions are increasing with CAGR of
35
25
Technology Adoption _at_ Reliance MF
26
Now all of these can be addressed by a click of
a button
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
experience
27
Business Easy Core Functionality
28
Distributor Initiated Transaction
SAVE MORE TIME COST
WITH OUR NEW
DISTRIBUTOR INITIATED
TRANSACTION.
29
The eLearning EDGE
  • Online mini courses
  • Animated Courses
  • Video Courses
  • Game based learning
  • Quizzes / Assessments
  • Page turners

Technical skills
Life skills
Induction
Case study
Motivational
Exclusive for partners registered on Business
Easy Portal-www.rmfpartners.com
30
Industry will grow.its time to multiply your
efforts !
Synopsis
  • 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

31
Believe in your conviction
  • Inspired 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 !
32
Thank You
33
Indian MF Industry-Short Term trend
  • Significant increase in New SIP numbers since
    Feb14 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 !!!

34
IFA Business Model
Acquisition Through SIP Family Harvesting
  • Long Term Revenue for 3 years
  • Sustained and incremental growth
  • Reduces the risk of investor dropout
  • 1SIP Investor 3 years

1 Family 4 SIPs
Family Harvesting
35
IFA Business Potential
July 2014
Back
2X Activation
5X Inflows
4X New SIPs
5X Inflows
July 2015
  • Just by doubling the number of active IFAs can
    enhance business exponentially

36
Investor Category Trends- AUM
Mar14
Mar13
  • Apr-Jun14 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

37
Reliance Portfolio SIP
Embedded Financial Planning Solution through SIP
  • 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 SIP
Enjoy the benefit of diversifying across
different asset classes in just Rs 5000!
38
Customer for Life Concept
Reliance Portfolio SIP
Reliance Portfolio SIP Answers for all your
customers questions
  • 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!
39
Reliance Portfolio SIP
Reliance PSIP vs Single SIP
Reliance PSIP - A New Thought to Asset
Allocation
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