USP For Retaining Clients

In February the capital market regulator Securities and Exchange Board of India (Sebi) allowed investors to invest in Mutual Funds (MFs) through stock exchanges directly from the fund houses without going through distributors, to ensure a level playing field. This was welcomed by fund houses, which could further lower the transaction expenses and skip paying the distributor’s commission. Even before this announcement, there were other direct channels available to investors. There is no doubt that investors who opted for Do it Yourself (DIY) mode or direct mode have increased from 5 per cent (12 plus months ago) to 15 per cent of current MF transactions. However, the complimentary metrics for the MF transaction undertaken during the time period is not that encouraging, which is approx 55 per cent of the redemptions is from DIY mode. This clearly shows retail investors panic and...