How Mutual Fund Distributors can sell other products – Insurance, PMS, AIF, bonds – and increase income

As a Mutual Fund Distributor (MFD), you have already built strong and lasting relationships with your clients who trust you to navigate their investment journeys. But what if you could further strengthen those relationships and increase your revenue by offering a broader range of financial products? Expanding your offerings will help your clients achieve their financial goals and make it harder for them to adopt a Do-it-Yourself (DIY) approach. This growth not only provides value to your clients but also boosts your business potential, leading to more revenue.

In this article, we will break down the additional financial products you can offer to grow your business beyond mutual funds.

1. Stockbroking: A Growing Opportunity

India is experiencing a stock market revolution, with an increasing number of investors looking to buy stocks directly. The number of Demat accounts has skyrocketed, rising fourfold since 2019 to reach 192 million by FY25. This trend shows that your clients may also be interested in investing in stocks directly.

How to Include Stockbroking in Your Offerings:

You can offer stockbroking services by partnering with an authorised broker like Wealthy. This allows your clients to invest in stocks through the same platform where they already invest in mutual funds, enhancing their overall investing experience.

As a stockbroker, you earn commissions on each trade your clients make. This includes one-time account setup fees as well as ongoing commissions for every buy or sell transaction. This can substantially increase your income potential.

2. Insurance: Protecting Clients’ Wealth

While mutual funds and stocks are key to wealth creation, protection is equally important. Unexpected health issues, accidents, or the untimely passing of a breadwinner can quickly deplete your client’s savings and affect their financial future.

Why Insurance Is a Natural Addition:

By offering life insurance and health insurance, you protect your clients’ wealth and provide them with peace of mind. This also strengthens your relationship with clients by showing that you’re committed to their long-term financial well-being.

How to Offer Insurance? You have two options for selling insurance:

• Get certified by the Insurance Regulatory and Development Authority of India (IRDAI)
• Partner with platforms like Wealthy that help you sell insurance without additional complexities.

Both options allow you to expand your services with minimal hassle.

3. Fixed-Income Instruments: Stability for Clients

Fixed-income instruments like Fixed Deposits (FDs) and bonds are low-risk, popular investment options in India. Many clients may already be familiar with these products, making them an easy sell. They offer stability and are ideal for conservative investors looking for safe returns.

4. Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs)

If you're looking to cater to high-net-worth individuals (HNIs), offering Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs) will help differentiate you from other MFDs.

Portfolio Management Services (PMS)

PMS involves the active management of a concentrated portfolio of stocks tailored to the client’s financial goals. This service typically requires a minimum investment of ₹50 lakhs and is designed to take on higher risk for potentially superior returns compared to mutual funds.

Alternative Investment Funds (AIFs)

AIFs, with a minimum ticket size of ₹1 crore, are designed for exclusive investments in areas like private equity, hedge funds, and real estate. These alternative asset classes offer diversification, which can lower the overall risk of a portfolio.

Why Offering PMS and AIFs Is Beneficial:

These services are not offered by every MFD, so by including PMS and AIFs in your offerings, you demonstrate a deep understanding of advanced investment strategies. Moreover, the commissions for PMS and AIFs are often higher due to their exclusive nature, which can significantly increase your revenue.

Build a Comprehensive Financial Strategy

Expanding your product offering beyond mutual funds is an excellent strategy to grow your business, increase your revenue, and provide even more value to your clients. By offering stockbroking, insurance, fixed-income products, PMS, and AIFs, you position yourself as a trusted financial advisor who can help clients achieve their long-term financial goals.

Are you ready to broaden your business?