Mutual funds try out new incentives to keep star distributors happy

MUMBAI: Offer training & networking trips at home and abroad, but many prefer cash prizes, exotic junkets Mutual funds are trying out new ways to keep star distributors interested in pushing their products following the industry's decision to cap upfront commissions to these intermediaries. Various mutual funds are organising exclusive training and networking programmes for these distributors, deviating from their usual practice of sending them on exotic junkets and doling out cash incentives.

For instance, Motilal Oswal Asset Management is taking 20 distributors to Omaha, USA to attend the annual general meeting (AGM) of Berkshire Hathaway addressed by renowned investor Warren Buffet. These distributors will also attend the 12th Annual Value Investor Conference in Omaha on May 1, 2015.

SBI Mutual Fund ran a contest to select advisors to attend an annual wealth conference at the headquarters of Amundi in Paris. The firm partly owns SBI Mutual Fund.

Mutual fund officials said such trips help distributors meet their counterparts and other big investors around the world.

DSP Blackrock invited Rick Kahler, a well-known US-based financial advisor, to conduct an Integrated Financial Planning workshop for a set of their financial advisors from all over India.

Such trips and seminars are organised for distributors, who meet steep sales targets. But, industry officials said fewer distributors opt for these programmes. Many of them still prefer exotic trips to South America and South Africa, cash prizes and expensive gifts.

For instance, a national distributor ran a contest for its financial advisors on behalf of a bank-sponsored fund house to sell closed-end NFOs. The advisors were offered a mobile worth Rs 25,000 for every Rs 1 crore they mopped up.

Besides equity mutual funds, distributors are also offered various incentives for selling company fixed deposits and non-convertible debentures (NCD). An NBFC mobilizing fixed deposits is said to have offered distributors a chance to meet the Mumbai Indians IPL team if they mobilized Rs 75 lakh.