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<keyword id="19896016" type="General" weightage="20" keywordseo="new-delhi" source="keywords">New Delhi</keyword>, <keyword id="20848502" type="General" weightage="20" keywordseo="mutual-fund-distributors" source="keywords">Mutual fund distributors</keyword> will now have the opportunity to receive trail commissions from <keyword id="20030502" type="General" weightage="20" keywordseo="asset-management-companies" source="keywords">Asset Management Companies</keyword> (AMCs) for assets transferred by an investor from one distributor to another. This change follows numerous requests from Mutual Fund Distributors (MFDs) to review the current AMFI Registration Number (ARN) transfer norms. These norms currently prevent AMCs from paying trail commissions to the new distributor when an investor transfers their assets to a new <keyword id="20094258" type="General" weightage="20" keywordseo="mfd" source="keywords">MFD</keyword>. In a communication to its members on Tuesday, <keyword id="20090034" type="General" weightage="20" keywordseo="association-of-mutual-funds" source="keywords">Association of Mutual Funds</keyword> in India (Amfi) permitted AMCs to pay trail commission to distributors in case a client transfers his assets from one distributor to another. However, AMCs can only pay trail commission after cooling off period of six months from the date of transfer of assets by investors. "In respect of change in distributor/ ARN code initiated by the investor, the AMCs may consider making payment of trail commission to the transferee distributor after a cooling off period of six months from the change of distributor code in the unitholder database," the industry body said. Further, It said that the payment of commission to the new (transferee) distributor would be based on the lower of the commission rate of the transferor and the transferee distributor. The mutual fund body further clarified that apart from trail commission, no other payments of any kind, including incentives, will be made regarding changes in the distributor. The industry body Amfi noted that the current ARN rule was introduced over a decade ago to curb certain market practices prevailing then, which may no longer be prevalent, and also since the transferee mutual fund distributor provides the same level of support and service to the concerned investors on the transferred assets.

Mutual Fund distributors to get trail commissions for investor asset transfers

Mumbai, Markets regulator Sebi is building an artificial intelligence tool to help detect misselling by mutual funds, its <keyword id="15070191" type="General" weightage="50" keywordseo="chairperson-madhabi-puri-buch" source="Orion">Chairperson Madhabi Puri Buch</keyword> said on Tuesday. She cited a recent incident of a 90-year-old being sold a product with a seven-year lock-in period to illustrate an instance of misselling, and said algorithms will help flag such cases. "We are working on the question of misselling that may happen by a mutual fund distributor or an agent or by someone who is the responsibility of the mutual fund," Buch said while speaking at the fourth <keyword id="9621521" type="General" weightage="20" keywordseo="global-fintech-fest" source="Orion">Global Fintech Fest</keyword> here. She admitted that this is a very complex problem requiring intelligence, and added that the algorithm being built will have the essential tools to detect misselling like flagging the case of a 90-year-old being sold the product with a long lock-in period. At present, mutual funds submit essential data to Sebi periodically with respect to compliance with regulations. A "nil report" is considered the best, Buch said. At the same time, Buch said there may be misselling that may go unnoticed in the rule-based supervision and those same will be detected with the AI tool. "As we move to using AI to analyse the data, we hope that we will also find the ability to monitor these things (misselling) in the interest of the investors," she said. Meanwhile, Buch said the regulator is also keen to introduce fractional ownership of shares but the current legal set up does not allow it. "Somebody came with that (idea) and we thought it was good... we would have wanted to welcome them into the innovation sandbox but it is not permitted in the <keyword id="4625796" type="General" weightage="20" keywordseo="sebi-act" source="Orion">Sebi Act</keyword> itself. "It cannot be done until we change the Act -- not just the Sebi Act, but also the Companies Act," she said.

Sebi working on AI tool to curb misselling by mutual funds: Buch

<ul><li>In our latest interview series, we talk to brands to understand how they are coping with the new normal and their strategies towards navigating these difficult times.</li><li><keyword id="878756" type="PERSON" weightage="100" keywordseo="Sandeep-Walunj">Sandeep Walunj</keyword>, CMO, Nippon Life India Asset Management shares with us a few advantages of selling a digital product, why there is a need to change the marketing strategy to help consumers through these unprecedented days, and the importance of empowering your employees to be prepared for a crisis. </li><li>He further helps us understand how the <keyword id="6357979" type="UNKNOWN" weightage="20" keywordseo="mutual-funds">mutual funds</keyword> industry has been shaping up in the past two months, how long it will take to recover and what its future holds. </li></ul><keyword id="8763838" type="UNKNOWN" weightage="20" keywordseo="covid-19">COVID-19</keyword> has altered the way we walk, work, communicate with people or shop. It has pushed us to accept digitalisation at a rapid pace. Companies that offer digital solutions have seen an accelerating growth due to this sudden shift in consumer behaviour and nationwide lockdown. Being associated with a virtual product, Sandeep Walunj, CMO of Nippon Life India Asset Management has seen this trend emerge up close. The company was equipped well in advance to face the crisis and smoothly shifted to the work-from-home format. Now, after doing some social listening, it changed the course of its conversation to offering long-term solutions like securing long-term wealth, focusing on children’s education, well-being products and upped its short-term recovery-linked solutions. It has also seen an uptick in engagement on social media and consumers are reaching out to the company with their queries, not the other way round. As a result, Nippon Life Asset Management has doubled its content pieces to help them choose the right product in a crisis that is thrown in our way. Walunj further shared with us how the BFSI industry is bound to change after the pandemic, why the brand continues to invest more in television and digital mediums, and how the companies need to do their bit to help the society in this tough time. Excerpts: Q. How has the last month been for you? How have you observed the consumer behaviour changing? Thankfully, we design and market a virtual product that can be propositioned remotely, explained over audio-video and easily traded digitally. Being always ahead of the curve on digital readiness (be it as a social forum for explaining the products, a transaction platform for buying and selling as well as digital customer care solutions for post-purchase service) we have been seeing more and more investors interacting with us digitally; over the last 5-6 years. So, in a way, I can say that we were prepared for this – we just had to scale up fast. Key changes I observed in investor behaviour are three: much higher traffic on our social and digital assets due to anxiety as well as curiosity, deeper interaction at almost every social touch-point (as a result of more time at their disposal) and a change in product mix towards both opportunistic short and very long-term products. As I said, some of it we anticipated and were ready for and a good part of it was down to quick and thorough adaptation by the team and the ecosystem. I must say a few words about the intermediaries – the mutual fund distributors/ advisors. We call them partners. They have been adapting very fast to digitization. Adoption of our digital transaction platform Business Easy, attending various training sessions to upskill/ refresh themselves as well as engaging very meaningfully on social media with their investors; they have been quick, comprehensive and positive. Q. In these uncertain and stressful days, how are you communicating with your audience? They are finding us rather than we finding them! Our social handles are buzzing with an unprecedented number of conversations, our partners are sharing almost double the usual number of content pieces with their investors and our sales teams are strengthening our distribution partnerships with stronger and deeper content integration. The focus is on product knowledge, correct usage, right investment habits in a situation like this and innovative products that address some opportunities that this crisis has thrown up. On another note, I want to talk about a very successful and deeply appreciated initiative, ‘Wealth of Talent’. This is aimed at our distribution (channel) partners and their families. We have encouraged them to shoot videos or photographs of themselves (or their family members) singing, dancing, drawing, exercising, cooking etc and upload the same on FB page called Wealth of Talent. We have an overwhelming number of videos on the page but more importantly, very grateful partners who are happy that their hidden talent (as well as their sons’ and daughters’) was recognised by the world; thanks to Nippon India Mutual Fund! Q. Have you introduced any new tools to empower your employees to deal with consumer queries? We were digitally-enabled to a large extent. Our IT team was quick to roll-out robust video interaction solutions that could easily handle larger number of participants. Our partners across social listening, ORM as well as marketing solution development were quick to scale up to higher volume, frequent reporting and higher output. We also rolled out many internal initiatives aimed at team bonding, connect and relaxation. All this ensured that our response, as an organization, has been as good as ever, if not better than ever! Q. Are you using this time to upskill them? Yes, there's suddenly more time on everyone’s hands. In a city like Mumbai, where a large number of us are based, one easily saves between 3-5 hours everyday due to work from home. Add to that less time wasters like extended lunch hours, and there is more time on everyone’s hands. Hence, even the regular work reviews are deeper, with concepts explained patiently, doubts asked freely and more data analysed. Add to that the very pertinent training sessions curated by the HR team and various vendor partners, and we have a rich menu of options to choose from. We also encouraged teammates to enroll for outside certification programmes (many institutions and universities have offered a wide range of courses) and many have opted for those too. Q. How do you see the BFSI industry shaping up after the lockdown? Parts of it like Insurance – which will have the least impact – will actually benefit from better appreciation of life’s uncertainties and increased saving/ reduced spending. They will be ready with innovative products, go-to-market processes and impactful communication solutions. Investment Services like ourselves will have to wait a little longer before the recovery is apparent before the volumes are back but then, in the meanwhile, we need to adapt quickly to changing consumer behaviour like securing long-term wealth, focusing on child education and well-being products and short-term recovery linked products. Asset financing and NBFC related business have a longer road to recovery but I am sure keeping in close touch with consumers and being on the toes for quick adaptation will help the more agile ones recover faster. Q. Tell us a bit about your partnership with business channels. What role do you play there? Television is a medium with the largest reach as well as considerable impact. We have been successfully partnering with them to get the right solutions to investors which are tailor-made for the current market scenario. I played the matchmaker here between the channel editors that wanted appropriate, relevant content to guide their viewers (in terms of right products to invest in) and our business team that wanted these products to be presented well and made visible. So briefing the editorial teams, liaising with them to shape powerful content and developing appropriate ads to leverage the association; were the key tasks, apart from the media buying and spot scheduling part. These partnerships are now growing beyond television and towards quality, respectful print publications that want to bring the cutting edge, more relevant products to their readers. Q. What does your media plan look like? Which medium gets your lion's share? Digital and Television, quite understandably. However, we keep observing, evaluating all media alternatives and deploy the most appropriate one given the communication and business task. Q. How are you doing your bit to help the society in these certain times? Nippon Life India AMC was the first Mutual Fund and amongst the first BFSI companies to donate a sum of Rs 5 crore to PM CARES as well as CM Relief Fund. Apart from our CSR funds, each and every employee contributed a minimum one day’s salary towards this. Many of us still proudly display badges on our social media profiles that show how proud we are for having achieved this feat. As mentioned above, we are among the first BFSI companies to fully enable our partners to work from home (digital platforms and scaling up) and also among the most resourceful ones in terms of marketing materials that help them to generate and fulfil leads. We have been regularly putting up useful and impactful communication to facilitate healthcare workers. We have also trained our employees (when our branches reopened) in guiding our investors properly about COVID-19 control measures and we actively called them ‘COVID Warriors’.

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Mutual Fund distributors to get trail commissions for investor asset transfers

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Sebi working on AI tool to curb misselling by mutual funds: Buch

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Marketing in the times of COVID-19: Nippon India Mutual Fund

Karuna Sharma

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