UTI Mutual Fund and CNBC-TV18 honoured the best financial advisors who have set a benchmark by maximizing the investors’ returns through sound advice in the highly volatile markets. ‘UTI MF and CNBC-TV18 –Financial Advisor Awards, 08-09’ are authoritative awards that recognize the potential of nation’s best financial advisors and felicitate them for their unparalleled service and contribution. The awards were held in Mumbai with Mr. D. Swarup, Chairman, Pension Fund Regulatory and Development Authority (PFRDA) as the Chief Guest for the ceremony. Also present on the occasion were Mr. U.K. Sinha, CMD, UTI Mutual Fund and A. P. Kurian, Chairman Association of Mutual Funds in India (AMFI) among other dignitaries from the industry.
Below are the excerpts of Mr D. Swarup’s address at the event:
- Swarup Committee’s main objectives are
1 Investor Protection
2 Promoting and increasing investor awareness - The committee took into account the existing global as well as domestic measures for investor protection for making its recommendations
- For the first time we had a public hearing in the consultation papers
- Across the country the committee came across differential pricing, lack of common norms and lack of common minimum standards
- A committee set up earlier to the same effect had concluded that the things were right for the time being.
- When number of investors and instruments are few, there’s no need for regulator. But now India has 3 million Financial advisors and banking staff selling non banking financial instruments and these numbers will grow exponentially in the future
- The latest research suggests that 70% of investors relied on the advice of their financial advisors while making their last purchase.
- As opposed to physical products, financial products are invisible and their outcomes are not known immediately and hence they have to be treated differently.
- A recent report suggested that the ‘lapsation’ rate ranged from 4% to 80% with an average of 20%. While no single factor can be the reason can be blamed for this, mis-selling is one of the main reasons for it.
- The committee has concluded that there is a need for a common approach for regulating the financial sector.
- There should be common minimum standards across financial products and advisors.
- There should be a common disclosure norm for costs, fees, risks etc.
- There is always an inertia to change but once the change happens it is accepted
- We are only suggesting that the revenue model be changed.
- When the revenue model changes from being embedded in cost to a fee based model, consumers have more choice and they will ask the right questions to their financial advisors
- The committee will finalise its recommendations in 2-3 weeks
Excerpts of Mr. U.K. Sinha’s (CMD, UTI Mutual Fund) address:
- Today, Individual Financial Advisors, as professionals, are facing regulatory changes. We would like to assure that UTI will work with the Individual Financial Advisors in this new environment.
- We are taking measures to turn the individual financial advisors into financial planners
- The new regulatory changes are here to stay, it is important to transform and prepare ourselves for the future and customer needs
- We believe that there should be uniform rules for financial sectors.
Excerpts of address by A. P. Kurian, Chairman Association of Mutual Funds in India (AMFI):
- It’s too early to make an assessment of the fallout of the regulatory changes.
- There has been a shift in the way business is done.
- This is a phase of recalibrating, readjusting and understanding.
- High end of the individual financial advisors are moving into advisory mode. Transparency in pricing is a welcome change.
Commenting on the awards, Mr. Neel Chowdhury, Vice President, CNBC-TV18 and CNBC AWAAZ said, “The year 2008-2009 has been a great learning experience especially for the markets and investors. While doubt prevailed in their minds, especially post September 2008, the prudent advice by the financial advisors helped in restoring investor confidence. Financial Advisor Awards 08-09 are our way of highlighting and honouring those financial advisors who have played a crucial role in retaining the confidence of retail investors by maximising their returns.”
Speaking about the awards Mr. U K Sinha, CMD, UTI MF said “The Financial Advisor Awards is an initiative to recognise the critical role that financial advisors play in the India’s wealth creation process. The award is recognition for the best financial advisors across cities and categories. Their contribution to sustainable wealth creation has the potential to raise the bar and set new benchmarks for newer entrants.”
“This year we received more than 10000 nominations against 2200 last year.” Mr Sinha added
The process of selecting the award winners from a list of accomplished Financial Advisors was an extremely challenging task and was based on extensive research and analysis. ICRA Limited, India’s leading provider of investment information and credit rating services in India, and an Associate of Moody’s Investors Service, conduct the evaluation process.
The winners of these defining awards are selected through a stringent Evaluation Process which was divided in three stages:
- The first stage consisted of the screening of completed nomination application forms.
- This was followed by short listing of a limited number of financial advisors in each category. Detailed information was sought and analysis was carried out based on extensive interactions with ICRA.
- The third stage involved three final short listed financial advisors going through a round of presentations to a jury comprising of industry experts, regulators, CNBC-TV18 representatives, and representatives from ICRA.
The entries were evaluated on the following indicative parameters:
* Quantitative parameters:
- Assets under management [size]
- Asset profile
- Investor Accounts
- Number of investment advisors
- Number of products offered
* Qualitative parameters
- Educational/Professional Qualifications
- Experience
- Client Servicing
- Scope of Services
- Forms of compensation
- Quality of research/ advice - based on feedback from investor sample
[poll conducted by Moneycontrol.com] - Quality of service -- based on feedback from investor sample
[poll conducted by Moneycontrol.com]
About UTI Mutual Fund
UTI Mutual Fund is a SEBI registered mutual fund whose Sponsors are State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation of India.
UTI Mutual Fund has assets under management (average) of Rs.73925.90 crore and investor accounts of over 9.75 million under its 76 domestic schemes (as of August 31, 2009).
UTI Mutual Fund reaches out to its investors through its wide distribution network, comprising 134 Financial Centers (UFCs), 340 Chief Representative offices, 110 Chief Agents and over 38000 AMFI certified Financial Advisors and through tie-ups with several Banks and Department of Post.
About CNBC-TV18:
CNBC-TVI8 is India's No.1 business medium. CNBC-TV18 is the undisputed leader in the business. The channel's benchmark coverage extends from corporate news, financial markets coverage, expert perspective on investing and management to industry verticals and beyond. CNBC-TV18 has been constantly innovating with new genres of programming that helps make business more relevant to different constituencies across India. CNBC-TV18 is currently available in over 20 million households in India.
