Infiniti: Sales and Distribution of Mutual Funds

INFINITI: SALES AND DISTRIBUTION OF MUTUAL FUNDS

Infiniti and the investment scenario in India

* Small player among mutual funds, lesser brand recognition

* Till 2010, consuming population to increase by 280 mn and low penetration level of financial products- so good opportunity, if assisted by a credible distribution network.

* Household preference for physical assets than financial assets. Low confidence in mutual funds as investment alternative.

Indication of good growth prospects in the future

* Large no of individuals have broken away from LIC, UTI, etc and formed their own distribution firms.

* Massive fund mobilization by Reliance and Magna Fund

* Leading AMC’s establishing profitable practices in distribution channel for long term growth.

Analysis and recommendations:

Infiniti has been able to steadily increase its market share since December 2001. In the midst of several joint ventures, Infiniti has been able to hold on its own and has been ranked 7th considering the market share by assets under management of Private MF firms. Even now, the Super SIP is an innovative scheme, first of its kind.

Since this is the first time that a scheme like Super SIP is introduced, there would be an urgent need to train distributors about the scheme as retail investors give regard to distributor’s recommendations.

For SIP, Infiniti should focus on retail investors as they would be more interested in life insurance policy bundled with a mutual fund investment, than the institutional investors.

Infiniti should also start working towards the 600 institutions that have the ability to form the target market for the direct salesforce.

To expand its share throughout, public sector banks would be an efficient vehicle. With a part of population in the conservative mode, these banks would act as a mediator between Infiniti and them through their trust and retail relationships.