Source/Contribution by : NJ Publications
The current scenario in India with respect to investing and overall market conditions is being perceived as the golden period for financial advisory business. This is the time when the stars are on your side. There are a number of factors which are contributing to making the environment favourable for growth of financial advisory business, like the rising market levels, positive sentiment, propaganda by AMCs, decline in appeal of other asset classes, etc., are all adding to the charisma of Mutual Funds.
Let's look at these factors in detail:
Media Campaigns: We understand the potential of the product we sell, but at times it becomes a herculean task to explain this potential to the investors if it has never appeared on TV, many people don't know anything about Mutual Funds beyond its name. Earlier we did not see many TV Commercials on Mutual Funds, only traditional endowment policy commercials were to be seen, but now, AMFI as well as individual AMC's have started propagating Mutual Funds through various mediums like TV, Radio and Print Media. Nowadays, we often get to hear radio commercials on Mutual Funds from AMCs. AMFI's investor education initiative “Mutual Fund Sahi Hai” Campaign has been successful in creating awareness about Mutual Funds among Indians. Even if it does not convince people to take the plunge, at least it generates curiosity, which gives you a chance to exhibit your offerings. Media exercises a significant impact and it is expected to boost your business in the near future.
Market sentiment: Talking about sentiment, you couldn't have asked for better. Markets are on a bull run since over 3 years. The Sensex has surged from 20,000 level in January 2014 to 34,000 level in April 2018. Investors have made enormous wealth by being invested in Equity over the last few years, and the good part is all newspapers and media houses are showing positive signals for the near future, and it is a huge motivating factor for more and more people to explore equity.
Bank Interest Rates: Fixed Deposits have remained as the preferred investment option for a large majority of Indians. But lately this option is losing it's luminance because the interest rates offered by all major banks on their fixed deposits are in the 6-7% range for almost two years now. Because of such low payouts people are looking for better alternatives for investing their money.
The present scenario with respect to fixed deposits lands financial advisors in a favourable position,
it's an opportunity for us to showcase our product basket to the FD investors. You can offer Debt Funds or Bonds to the fixed deposit investors who are looking for better returns, but aren't willing to dive into equity. Also there are people who invest in Fixed Deposits for very long periods like 10 years or more, this is a good time to highlight to them the need to invest in Equity, since over long periods the risk in Equity gets controlled, and secondly how the investors are heavily losing out on returns, especially over such long periods.
Gold: The all time favourite of Indian investors is also losing it's shine, people who bought gold after mid 2012, are either at par or have lost money. So, this scenario has demotivated investors and they don't want to inject more money into gold. So, this is your chance to divert gold investors into Mutual Funds.
Real estate: Another hot thing among the Indian investor fraternity, Real Estate, shares a similar story. People have made humungous money in properties in the past, but lately property prices have remained flat in most parts of the country, and the future prospects are also difficult to ascertain owing to the increasing regulatory restrictions in the sector and the large number of low cost houses being constructed by the state. So, again Mutual Funds offer a good investing alternate to property investors.
So, looking at the above factors, this is one of the most opportune moments for growing your business, the ball is in your court, your victory depends upon your service capabilities.
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