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Dear AMC’s
It’s good that you have become independent and have started taking your decisions on your Own. We are very happy for your growing Maturity. As a best friend or a Life Partner feels proud for others success we too are proud of your Success.
Let us flash back on Wonderful Moments in our life that we have spent & enjoyed together :-
1) Our long standing relationship originated from Day One of Your Setup:- The Day Asset Management business was made opened for other players in addition to UTI other AMC’s started operating in India along with old distributors of UTI and new distributors. Thus it’s a Day 1 standing relationship that we enjoyed together.
Misconception for Success:- As they say “Success has many Fathers, Failure has None” same thing seems happening with the Asset Management Business in India. There have been difficult times from the inception day of Asset Management Business which AMC’s & Distributors have faced together and come out stronger every time. But AMCs have been illusioned thinking that the success just belongs to them as having built up Huge AUMs with the help or partnership of Distributors and now as they feel they have grown up so they don’t need distributors any more. Let us go through some examples so that the fog on your spects can be cleared and u can see see clearly so as to avoid road blocks on your way.
a) Cricket is a religion in India and there cant be other better example to explain:- Remember the test match played between India and Australia in March 2001. Its was a tough time for India as we barely scored less runs and forced for a follow on in the first Innings by Aussies. The scene was clear we are to loose the game. But then came a Duo to the rescue VVS Laxman as the fans lovely call him Very Very Very Special Laxman & The Formidable Wall of the India Cricket History Rahul Dravid. Major credit went to VVS Laxman but it was the Rahul Dravid who silently went on scoring Run over Run which helped Laxman to built his innings and Consequently we Scored a Huge miraculous Score.
Twist in the story came when inspite being scoring a huge total India managed to win barely through the final overs. Moral of the story remains it was the Dravids Silent Innings which made Laxman to Huge individual score, huge only in Individual Perspective but when compared to dravids score it was just some more runs over him. If Dravid would have scored that many runs LAXMANS Inning would have been in Vain and if dravid wouldn’t have stayed that long on the pitch it was impossible for Laxman to score Runs.
In the above story AMC’s symbolize VVS Laxman & Distributors are Rahul Dravid.
b) Introspection need of the hour AMC’s :- The way AMCs are celebrating Success of Direct Plans have come to reality because of Distributors sweat and hard work put in for long years in explaining Mutual Fund as a product to investors and their investor awareness intiatives.
Origin of Direct Plans can be traced from the Investment Managers lack of skill and competence and for their incapabilities they want distributors out ot the business. Let us take you to flash back from 1-Jan-2008 the time when Markets were trading at peak levels created illusion for Fund managers that they have made good performance then came the era of real testing time. It a proven fact that many equity funds failed miserably to perform during the period Jan 2008 to Sep 2013. The returns in Many equity schemes were negative for the period and if positive then it was very less for equity a product or to be more crystal clear Fund Managers pay packages were unjustified for such poor performance. As in the corporate governance language we say Promoters made money but investors remain beggars the same concept applied to Asset Management business wherein investment managers were earning hefty pay packages and the investors and distributors (as distributors had to face directly to investors) were having sleepless nights.
All so called rules of long term were kept on the floor as the investor who invested his lumpsum fund in jan 2008 was making losses or very less returns in many equity funds at the end of Sep 2013. A person who invested his Lumpsum investment keeping a goal in mind and the goal was to be met in 6 years lost faith in the defination of long term. The irony is AMCs justified it saying why do the investor pull out money ?????? Common an investor cant delay his childs marriage or Education juts for the sake of ur non performance. Biggest joke of the Long Term Investing theory..
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4) Doer escaped and innocent Caught :- The Regulator became active suddenly like the entry of Hero in a bollywood cinema. On having justification it was explained that the commission to distributors are very heavy and if these are reduced we will perform… Come on, there cant be a bigger joke than this and the regulator inspite being giving option to defend ruled out yes the culprit are distributors commission and if these are done away the Funds will start giving multibagger returns………… Biggest mystery every in the land of democracy, dictatorship prevailed
4) We as distributor fraternity wish u a very Happy and Successful Future.
AM
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