{"id":9,"date":"2016-08-23T14:45:35","date_gmt":"2016-08-23T14:45:35","guid":{"rendered":"http:\/\/bltpindia.com\/wordpress\/?p=9"},"modified":"2017-12-12T17:32:10","modified_gmt":"2017-12-12T17:32:10","slug":"challenges-to-mf-distributors-1","status":"publish","type":"post","link":"https:\/\/bltpindia.com\/wordpress\/index.php\/2016\/08\/23\/challenges-to-mf-distributors-1\/","title":{"rendered":"Challenges to MF Distributors – 1"},"content":{"rendered":"

As on today market scenario where distributors are still struggling to face the Direct Plans [Direct Channel] or DIY Model [Do IT Yourself] One more directive from the authority has announced Discloser of Commission from coming months.<\/b><\/p>\n

\"challanges4life\"<\/p>\n

Rather than falling in to the fear of commission Disclosers and thinking negative about the future be prepared for the new challenges before it hurts you. For facing the situation first of all you have to understand how the problem is become so big and how it will hurt you in the future.<\/i><\/b><\/p>\n

Real Challenges to MF Advisors are as follows<\/b><\/p>\n

1]<\/b> First challenge<\/b> was started 3 years back when Direct Plans<\/b> were introduced but that was taken lightly by the distributors and not taken proper steps to face that challenge. Now small difference [.5% to .75% yearly] in returns accumulated in sizable amount which encourages Investor to shift to Direct Plan<\/p>\n

2]<\/b> Second Competition<\/b> is from DIY [DO IT YOURSELF] model<\/b> of Investing in MF started with the Direct Plans. Still Distributors are thinking that what they are doing [SIPs\/STPs and SWPs] is sufficient to face the Competition arise from DIY model of investment. Due to this competition only HNIs were attracted. According to survey about 15-20% of transactions are done in Direct mode.<\/b><\/p>\n

3]<\/b> Now Third threat<\/b> to MF Distributors is from Commission Disclosers <\/b>which is supposed to start from Oct-16. Now from this Blow your investor will know what you have earned from his invested amount and start thinking about why they should not adopt DIY model of investment and earn higher return from Direct Investment. Due to this your Retail Investor will also start thinking for shifting to DIY Model.<\/b> <\/b>To face this kind of situation one should adopt unique kind of mechanism which will generate higher returns than what can be generated in traditional mechanism with direct plan to justify your charges<\/i><\/b>.<\/p>\n

4] One more threat<\/b> is also there with Reducing TER<\/b> which might come any time which will reduce your income. For facing this you should charge your investor on your advisory services. Actual problem for charging an investor will ask<\/b> what is the different strategy are you adopting while investment? And what is the Alpha you are generating? For which I have to pay your charges<\/b>. All the standard strategies can be run on DIY Model of investment through Direct Plan which is truly generating Alpha against Regular Plans.<\/p>\n

In all the motivational session everybody is advising you not to worry over it but nobody is suggesting you the way how to overcome the problem<\/b><\/p>\n

For facing above problem you don\u2019t have to be victim of extreme pessimism, just use the unique investment procedure which is not possible to do in DIY Model of Investment or through Direct Plans.<\/p>\n

\u201cThe success of any investment strategy bears heavily on the intelligence and technical skill of its practitioners, not only on fund\u201d<\/b><\/p>\n

Send your Feedback and Query<\/span><\/span><\/h4>\n