On Sebi nudge, Tata MF, SBI Mutual, ICICI Prudential speed up investor education

Nov 23 2013, 19:03 IST
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SBI has recently kickstarted its Fund Guru campaign and tied up with management institute XLRI. SBI has recently kickstarted its Fund Guru campaign and tied up with management institute XLRI.
SummaryMF industry may have to shell out roughly Rs 140-160 cr/year on investor awareness programmes.

Fund houses are slowly upping the tempo on their investor education and awareness programmes mandated by market regulator Sebi more than a year ago.

Tata MF recently launched Simply FQ, an inter-collegiate quiz competition on finance as part of its investor education initiative. It has also created a character Professor Simply Simple to simplify terminologies and concepts. Birla Sun Life has started a website janotohmano.com to educate first-time investors on mutual funds. ICICI Prudential has started ‘Invest Correctly’ initiative, whereby it has uploaded short videos and free investment guides on the website.

Franklin Templeton is looking to beef up its FT Academy initiative, which was originally launched in 2005 primarily focussed on advisors. It has now developed content for common investors covering 19 topics so far. SBI has recently kickstarted its Fund Guru campaign and tied up with management institute XLRI to hold training programmes to educate independent financial advisers (IFAs).

As an industry, MF body Amfi launched District Adoption Program (DAP) in August, whereby AMCs would voluntarily adopt one or more districts to boost the financial literacy among investors.

Calculation shows the MF industry may have to shell out roughly Rs 140-160 crore every year on investor awareness programmes. However, despite the spends, fund officials concede it may take a long time for these initiatives to bear fruit. “Indians are accustomed to saving or getting assured returns on their investments. This mindset may be difficult to change,” said Sundeep Sikka, CEO, Reliance MF.

Some experts reckon mass advertising through print, television or outdoor is unlikely to yield the desired results or help educate new investors and the industry needs to hold more face-to-face interactions with its target audience. “Finance is a complex subject and mass advertising can end up further confusing new investors. Investors need to be educated in detail about basic concepts such as compounding, effects of inflation and asset allocation. How can one ever do that by putting up a hoarding or through a 30 second commercial?” asked a fund official. There is also a criticism that the industry has been focussing too much on the top metros. However, Sikka said the fund houses were doing their best and roughly 12,000 educational camps were being conducted every year, about 80% of which were being held in the B15 cities.

“The industry has to start by educating people who are most willing to learn,” said Bobby Pawar, the director and chief creative officer of Publicis Worldwide (South Asia and India) at a mutual fund event held recently. Pawar added that colleges were a good hunting ground, particularly if fund houses were looking to tap the next generation of investors.

As per a Sebi circular on September 13, 2012, MFs are required to annually set apart at least 2 basis points on daily net assets of the schemes within the limits of total expenses for investor education and awareness initiatives undertaken.

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