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| Industry Trends |
15th July 2012 |
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| How effective are AMFI's investor education seminars? | ||||
| Wealth Forum Survey - July 2012 | ||||
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From May 2010 onwards, under AMFI's investor education program initiative, 36 AMCs have conducted a total of 19,576 sessions across 405 cities and towns, covering 706,982 investors. A lot of time, effort and money is being spent on this crucial program, which is seen as a critical long term initiative to expand the base of mutual fund investors in the country. This is a noble and laudable initiative of AMFI and AMCs - one which we believe must be encouraged and supported, as the benefits of category expansion from an initiative well executed will be there for all to partake. We asked advisors to give feedback on two aspects :
Many IFAs have been involved in various capacities in several of these seminars - either as joint organisers with AMCs, or as participants, or as hosts for their clients. Their feedback will surely help AMFI get a good ground-level perspective on how this initiative is actually panning out and what are some of the aspects that may need to be strengthened, in order for the industry to truly derive the benefits of this initiative. A total of 507 IFAs from across the country provided their responses to this survey - our sincere gratitude to each of the advisors who decided to spare some of their time and give constructive feedback on this vital initiative, which is aimed at category expansion. It is always tempting to give feedback and suggestions on matters that have an immediate personal impact - like commission structures. But, to take time out to provide inputs on something that can have little immediate personal impact, but potentially very significant long term impact, is truly commendable. The zone wise split of responses is as follows : North - 90 East - 102 South - 147 West - 168 In addition to the responses to the survey questions, about 50 advisors have also posted their specific comments on the survey page (Click Here). In this article, which is part I of a two part series, we present the findings of the survey on the first aspect - feedback on 10 different aspects of the current seminar series. In the next part, we will present advisor feedback on the 5 suggestions that Wealth Forum has offered on strengthening this program. How effective are AMFI's investor education seminars? For each of the questions, advisors were asked to give their rating on a 10 point scale. In the tables that follow, a zone-wise split of average scores as well as the actual distribution of scores is provided. Q1 : How satisfied are you with the quantum (number of ) sessions held in your city ? (Score of 1 denotes very dissatisfied while a score of 10 denotes extremely satisfied)
An all-India score of 3.3 out of 10 denotes a fair degree of dis-satisfaction over the quantum of seminars being held in each city. The zone wise split is fairly even - with North being a little more dissatisfied than other zones. As many as 66% of advisors have chosen to give a rating of 1, 2 or 3 on this score and only 8% have given a rating of 8 or above - clearly, very few advisors are happy on this score. If close to 20,000 seminars across over 400 cities evokes such a poor score, one can't help but surmise that many IFAs were perhaps unaware of all the seminars that were being conducted in their own cities. Q2 : How satisfied are you with the turnout for these sessions, in terms of no of investors actually coming for the sessions? (Score of 1 denotes very dissatisfied while a score of 10 denotes extremely satisfied)
Feedback on turnout is uniformly poor across all zones. Dis-satisfaction levels on this score are a little sharper - with 68% giving a score of 1, 2 or 3 and only 6% giving good scores of 8, 9 or 10. It appears that lack of awareness of these seminars is evident across IFAs as well as investors. There is perhaps a strong message here about the need to have a lot more publicity - among IFAs and investors - ahead of each seminar. 
Q3 :How satisfied are you with the proportion of new / first time MF investors attending these sessions? (Score of 1 denotes very dissatisfied while a score of 10 denotes extremely satisfied)
If the central idea behind this initiative is category expansion and bringing in new investors into the MF industry, advisor feedback from this survey suggests that we are nowhere near that objective. An average score of 2.9 on 10 is quite a poor score - and what is worse is that there seems to be practically no zone in the country where IFAs have a good score to give on proportion of new / first time investors coming for these sessions. Q4 :How satisfied are you about the proportion of young savers coming to these sessions? (Score of 1 denotes very dissatisfied while a score of 10 denotes extremely satisfied)
Young savers are the future of the MF industry - it is their long term investments that will build the much needed stable retail flows for the industry and for advisors. It is indeed unfortunate that advisor feedback suggests that the industry is losing a big opportunity to engage this vital segment through these seminars. A score of 2.9 on 10 suggests that a lot more needs to be done to attract young savers to these seminars and make these seminars relevant to them. Q5 : How satisfied are you with the pre-publicity for the event, to ensure good turnout of prospective investors? (Score of 1 denotes very dissatisfied while a score of 10 denotes extremely satisfied)
It appears that not enough efforts are being made to publicise these seminars among the investing public - which perhaps explains the poor scores on investor turnout as well as the quality of people attending these seminars. Q6 : How satisfied are you about the quality of information and education being imparted to investors in these sessions? (Score of 1 denotes very dissatisfied while a score of 10 denotes extremely satisfied)
When it comes to the content of these seminars, advisor feedback is more encouraging - with a much better overall score of 4.6 on 10. The worry here is that one-third (34% to be precise) of the advisors have given a score of 1, 2 or 3 - which denotes significant dissatisfaction with the content. A noteworthy feature is that advisors in West and East are a lot more satisfied with the content than their counterparts in North and South. Q7 : How satisfied are you with the manner in which investor queries are addressed at these sessions? (Score of 1 denotes very dissatisfied while a score of 10 denotes extremely satisfied)
It appears that investor queries are being handled reasonably well at these seminars - as the score of 5 on 10 suggests. West and East zones seem the happiest on this score - in keeping with their overall satisfaction with the content of these seminars. Q8 :How confident are you that these sessions are helping significantly in building awareness of mutual funds and therefore are helping retail penetration for mutual funds? (Score of 1 denotes very dissatisfied while a score of 10 denotes extremely satisfied)
An overall score of 4.3 on this very important question suggests that some course corrections are clearly in order for this noble and laudable initiative to truly make the difference that it should in terms of category expansion. Q9 :To what extent do you agree with the statement that most of these sessions are being conducted with a "tick box" approach - ie being conducted with the main intention of showing numbers rather than with a genuine attempt to popularise mutual funds among retail savers? (Score of 1 denotes completely disagree with the statement, while a score of 10 denotes completely agree with the statement)
We asked this rather blunt question - and the response is quite disheartening. As many as 30% of advisors are absolutely convinced (score of 10 on 10) that AMC teams are merely going through the motions of conducting seminars as targets need to be achieved - that there is very little genuine effort being put into educating first time investors through these seminars. This feeling is most pronounced in the North. That as many as 30% of advisors strongly disagree with this statement (scores of 1, 2 or 3) suggests that this cynicism is not widespread - many of these seminars are indeed being conducted with "heart and soul" and not as mere "tick box" activities. That is indeed heartening to see. Q10 : Overall, how do you rate the effectiveness and impact of the investor education sessions being conducted in your city, from the perspective of building awareness for mutual funds and attracting new investors into the industry? (Score of 1 denotes very dissatisfied while a score of 10 denotes extremely satisfied)
An overall score of 3.7 out of 10 for this very important industry initiative is truly disappointing. The marked skew towards 1, 2 and 3 scores, across all zones, is also quite disappointing. The verdict from IFAs across the country seems to suggest that the considerable time, energy, effort and cost being spent on this initiative is not really being directed well enough - and that the results are unlikely to be commensurate with the expectations from an exercise of this scale. What should be done to make these seminars more effective? That this initiative is a step in the right direction is beyond doubt. What needs to be done is to tweak the aspects that need fine-tuning. It is in everybody's interests that this initiative delivers the desired results - of creating more confident, aware and educated mutual fund investors in the country. The scores from these 10 questions seem to point out to a larger marketing failure than a content failure - at least relatively speaking. Wealth Forum offered 5 suggestions to strengthen the marketing and content aspects of these seminars - in the second part of this two-part article, we bring you advisor feedback on our 5 suggestions. |
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