The no-entry load regime of Securities and Exchange Board of India (SEBI) has left mutual fund distributors with little choice but to increase their online presence.
The immediate gainers from such a move would be the online platforms that provide mutual fund (MF) distribution services.
As Kanwar Vivek, CEO of Birla Sun Life Distribution Company put it, “Online platforms are likely to find favour with people looking at mutual fund route for investment.”
Such platforms have existed for some time, though their reach has been limited.
“At present, 90 per cent investors use distributor services to invest in mutual funds. Only 10 per cent use online services to invest directly,” said Rajesh Krishnamoorthy, MD of iFAST Financial India.
“Servicing clients offline is an expensive proposition. Fund houses and distributors are showing interest in online platforms,” said Bikramjit Sen, CEO of TechProcess Solutions, which makes online solutions for MFs.
The Association of Mutual Funds in India (AMFI) is planning a common industry platform, said Jaideep Bhattacharya, Chief Marketing Officer of UTI Mutual Fund and chairman of the AMFI panel on the Common Industry Platform.
“The platform would improve accessibility to investors, ease of operation and cut cost for distributors. It would help increase penetration of asset management companies (AMCs),” he said, adding the platform would be operational by March, 2010.
“SEBI has taken the right step in empowering investors. Going forward, mutual funds would be the preferred route of investment,” said Birla Sun Life’s Vivek.