AMC Speak

We shared GEM with 1200 key IFAs

Ankur Thakore, National Head - Sales & Distribution, L&T MF

In a nutshell

Good performance catches an advisor's eye, but good performance that is consistent and is backed by a well-articulated process is what builds advisor confidence. That's what got Ankur and L&T MF's investment team to go out and conduct a series of roadshows where they engaged 1200 key IFAs from across the country, and took them through GEM - the process that goes into L&T MF's equity fund management. Read on as Ankur takes us through the roadshows initiative and find out more about L&T MF's fund management processes.

WF: What were the key messages you aimed at delivering in the recent round of distributor roadshows that you conducted in different cities?

Ankur: Over the course of last few years there have been number of occasions where we have had the opportunity of interacting with distributors. During these interactions, some of our distributors did tell us that they would like to know more about the way we manage money and wanted to know more on the thought process rather than any product.

Based on the feedback we got, we planned the distributor road-shows wherein we tried to give an insight into how the fund manager thinks and what has been their learning and experiences as investment managers. We believed that this would help distributors understand our investment process better and be more confident to recommend our funds to their customers. The intent was not making any product pitch or market view, but a sneak peek into the minds of the fund managers.

We also believe that outcome is difficult to predict and we have very little control on the way markets would behave, but if we have the process right eventually the results are likely to be favourable. Thus through this road show we wanted to explain what is our investment process and taking through each stage of the investment process in detail so as to give a clear understanding what is done at each stage by the investment team and what the various parameters looked in at each step. We think this was well accepted by the audience and will help us build our business in both good and bad times, as the confidence on the investment team has increased.

WF: What was the coverage of distributors achieved in these roadshows - in terms of numbers as well as geographic coverage?

Ankur: The regional road shows were conducted across 3 cities namely Delhi, Mumbai and Chennai and we had more than 1200 key IFAs who attended this event. These were regional events and we had participation from many cities in each region. We have 46 branches in these 3 regions and there are another 20-25 cities which we actively cover from our existing branch network and we had participation from all these locations. If we were to look at split in terms of T15 and B15, it was almost a 50-50 split in terms of number of people who had attended the event.

WF: Many fund houses talk about fund management processes, and explain their own philosophies in some detail. For distributors, it is sometimes difficult to differentiate one process from another. In this context, what do you realistically expect distributors to take away from presentations on fund management processes?

Ankur: It is our belief is that the result or output of performance of the schemes is more to do with the effort and the processes put by the organisation, and if we have the right processes, eventually the results turn out to be good. Our investment performance across asset classes has been reasonable over last few years and it was important for us to share with our partners what has lead to this success. Our endeavour was to explain what we do as a process so that it gives a better understanding to our distributors and have a higher confidence while representing us to their clients. The intent was to give a quick insight on how does the L&T Mutual Fund investment team thinks with regards various aspects of investing, whether it would as simple question as how does this team generate ideas, what are the basic filters used to start evaluating a company, to more complex part on how and what ratios are looked at more critically etc. There is always more to investment process than just the numbers, and the presentation was to talk beyond numbers. The point we were intended to drive was to help our distributors understand better on how and where they should position the fund house for their clients. Each distributor does look at some basic characteristic in a fund house and based on their understanding, position the same to their clients, this event for us was to give that definitive character of our fund house investment process. We do believe we have been able to communicate this to all those present and going forward should benefit from the same.

WF: What are the vibes that you picked up in this recent round of extensive distributor engagement? How is the pulse now? What are the opportunities and challenges that are occupying your distribution partners' minds right now?

Ankur: Overall all those present for the event are very optimistic on the growth of our industry and want to build on their business. Everybody agrees there will be challenges on the way, but each one of them is willing to fight these challenges, which is a very positive attribute. The opportunity which people look at is the under-penetration of mutual funds and them being in a position to capture the wallet share of these customers. Some of the individuals present for the event also believe that the technological improvement taking place in the financial services industry especially at the back-end would help them significantly improve their scale. The key challenges seen are more regulatory in nature. The worry for most is more to do with constant changes in regulations and them having to change the business model to align with new set of regulations at frequent intervals. Overall the mood is more positive than negative.

WF: Kailash made an important point in our last conference that adopting technology is the only way distributors can build scale cost effectively in the retail space in the current margin environment. What do you see as the key challenges in making this a reality? In what way are you helping distributors embrace technology?

Ankur: Our belief is that there is an enormous opportunity in embracing technology for execution in mutual fund business, back-end management and data analytics. With financial services going through a significant transition in terms of convenience of doing business, it is important for us make the same convenience available to our distributors for their clients. Our focus has been on how we make use of technology to ensure smoother transactions, with lower costs, convenience, and geography agnostic and be in a position to track failure of transactions. If we are able to deliver on these, we should help our distributors to gain scale, improve productivity of their team and also be able to track their business better.

Keeping in mind these facets, we have tried to build on various tools over period of time. One of first things we had launched was "Multi-SIP" which is a feature wherein with one cheque, the customer can choose up to 3 schemes for SIP thus reducing the paperwork, tracking and an effort to potentially to build on larger SIP book for the distributor. We have now also introduced online SIP renewal process on maturity wherein without any paper work the customer can now renew the SIP by just clicking a link and completing the banking transaction. This reduces the effort and time for our distributors and their customer. We have also introduced "Missed SIP" link. There are many instances wherein the customer misses the SIP instalment due some technical error, now they can execute their missed transactions completely online through a customised link sent to them and here too there is absolutely no paper work required. We are soon going to launch fund recommendation tool, wherein the distributor can send recommendation links to their customers which are pre-populated with all the desired fields and the customer can complete the transaction by completing the banking transaction. This will surely help distributors to build across cities and/or countries, it will also help them execute multiple transactions in a very short period of time.

We have also launched business analytics dash board which all our key distributors receives on a weekly basis which helps them understand their business progress with us and also finer things such as new customers added, SIP expiries, AUM break up etc. This report is one snapshot view help them understand their relationship with us.

All these we believe will help distributors reduce cost, improve efficiency and enhance revenues. As mentioned earlier we are working towards enhancing value to our distributors but reducing their effort by use of technology.

We also think, technology cannot replace the client engagement and hand holding is necessary and thus we have focussed more on using technology for the execution and business analytics.

WF: You have a well set fund management team that is delivering consistent performance on the back of a clear philosophy. How do you plan to leverage this to grow market share in the next couple of years?

Ankur: We have a very experienced investment team both on fixed income and equity. Over the last few years, our funds across equity and fixed income have delivered consistent returns. Also the consistency is seen across categories of product in each asset class and hence it has helped us gain in-roads across distribution channels and across product categories. Our endeavour has been to build broad base distribution and across products rather than focussing on one or two products or be aligned to a channel of distribution. This has helped us grow well in the last couple of years and we do expect this to improve over the next 2-3 years. We do believe that the mutual fund pie will increase significantly from here on as there will be a shift of investments from physical assets to financial assets and within that if we are able to grow more than the market then we can surely improve our market share significantly. Over period of time we do aspire to be one of the most preferred brands in the mutual fund across asset classes and our efforts have to been in that direction, with strong performance and fair practices, we do believe we would be able to achieve this goal.

Share this article