Indian Mutual Fund Industry – The Future in a Dynamic Environment Outlook for 2015 JUNE 20 09 Table of Contents 1. Executive Summary 2. The Indian Mutual Fund Industry – Current State 3. Challenges and Issues 4. Voice of the Customer 5. Future Outlook in a Dynamic Environment 6. Action Plan for Achieving Transformational Growth 7. Summary 01 03 10 15 20 26 32 Preface The Indian mutual fund industry has witnessed significant growth in the past few years driven by several favourable economic and demographic factors such as rising income levels and the increasing reach of Asset Management Companies (AMCs) and distributors.
However, after several years of relentless growth, the industry witnessed a fall of 8 percent in the assets under management in the financial year 2008-09 that has impacted revenues and profitability. Recent developments triggered by the global economic crisis have served to highlight the vulnerability of the Indian mutual fund industry to global economic turbulence and exposed our increased dependence on corporate customers and the retail distribution system.
It is therefore an opportune time for the industry to dwell on the experiences and develop a roadmap through a collaborative effort across all stakeholders, to achieve sustained profitable growth and strengthen investor faith and confidence in the health of the industry. Innovative strategies of AMCs and distributors, enabling support from the regulator SEBI, and pro-active initiatives from the industry bodies CII and AMFI are likely to be the key components in defining the future shape of the industry.
This report summarises the current state of the Indian mutual fund industry highlighting the key challenges and issues. We have also presented the ‘Voice of Customers’ to understand their needs and priorities as the industry defines the future roadmap for 2015. The report outlines an action plan for key stakeholders so as to surpass expectations of industry growth and profitability. KPMG acknowledges the inputs received from AMCs, distributors, customers and service providers for this report.
KPMG is privileged to be associated with the CII Mutual Fund Summit 2009 as Knowledge Partner on the theme ’Indian Mutual Fund Industry – The Future in a Dynamic Environment’. Abizer Diwanji Head – Financial Services KPMG in India © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Foreword Relatively low penetration levels combined with rapid growth in the assets under management in recent years point to the high growth potential of the Indian mutual fund industry.
The recent developments of the past few months, triggered by the global economic crisis, have shown that the Indian mutual fund industry is not decoupled from global developments. The financial turmoil has served to highlight the benefits of investing in mutual funds, in particular, in comparison with directly investing in stocks. Going forward, the Indian mutual fund industry is expected to secure growth by catering to the evolving aspirations of retail customers.
The industry seeks to target an increased share of the customer wallet through product innovation combined with deeper retail penetration by expanding reach into Tier 2 and Tier 3 towns. The industry will need to incorporate capital safety features in product design, build strong brands that are hallmarks of financial integrity, service orientation and sustained fund performance. Building investors’ trust and increased customer awareness through initiatives aimed at promoting financial literacy will be critical factors towards building greater retail participation.
It is therefore an opportune time for the industry to introspect on the learnings and experiences of the past decade and develop a roadmap through a collaborative effort across all stakeholders, to achieve sustained profitable growth. We hope you will find this report interesting and useful. U K Sinha Chairman – CII National Committee on Mutual Funds Chairman and Managing Director, UTI Asset Management Company Limited © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 1 1. Executive Summary
Current State India has been amongst the fastest growing markets for mutual funds since 2004, witnessing a CAGR of 29 percent in the five-year period from 2004 to 2008 as against the global average of 4 percent. The increase in revenue and profitability, however, has not been commensurate with the AUM growth in the last five years. Low share of global assets under management, low penetration levels, limited share of mutual funds in the household financial savings and the climbing growth rates in the last few years that are amongst the highest in the world, all point to the future potential of the Indian mutual fund industry.
Challenges and Issues Low customer awareness levels and financial literacy pose the biggest challenge to channelising household savings into mutual funds. Further, fund houses have shown limited focus on increasing retail penetration and building retail AUM. Most AMCs and distributors have a limited focus beyond the top 20 cities that is manifested in limited distribution channels and investor servicing. The Indian mutual fund industry has largely been product-led and not sufficiently customer focused with limited focus being accorded by players to innovation and new product development.
Further there is limited flexibility in fees and pricing structures currently. Distributors and the mutual fund houses have exhibited limited interest in continuously engaging with customers post closure of sale as the commissions and incentives have been largely in the form of upfront fees from product sales. Limited focus of the public sector network including public sector banks, India Post etc on distribution of mutual funds has also impeded the growth of the industry.
Further multiple regulatory frameworks govern different verticals within the financial services sector, such as differential policies pertaining to the PAN card requirement, mode of payment (cash vs cheque), funds management by insurance companies and commission structures, among others. Voice of the Customer CII-KPMG conducted a ‘Voice of the Customer’ survey to help understand the buying behaviour of existing and potential investors in mutual funds, and to obtain feedback on their wish-list from various stakeholders including fund houses, distributors, service providers and the regulator.
Factors that are impediments to mutual fund investing are availability of a large number of mutual funds schemes that makes investment decision complex and difficult, complicated KYC norms that restrict potential © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 2 investors, and quality of advice provided. After sales service and ongoing follow up have been identified by customers as the key differentiators in assessing the capabilities of distributors.
Drivers for purchase of mutual funds include tax benefits of mutual fund investments, consistency in fund performance and brand equity. Simplification of processes such as the application and redemption process could potentially increase the quantum of investments in mutual funds. Future Outlook in a Dynamic Environment KPMG in India is of the view that the industry AUM is likely to continue to grow in the range of 15 to 25 percent from the period 2010 to 2015 based on the pace of economic growth.
In the event of a quick economic revival and positive reinforcement of growth drivers identified, KPMG in India is of the view that the Indian mutual fund industry may grow at the rate of 22 to 25 percent in the period from 2010 to 2015, resulting in AUM of INR 16,000 to 18,000 billion in 2015. In the event of a relatively slower economic revival resulting in the identified growth drivers not reaching their full potential, KPMG in India is of the view that the Indian mutual fund industry may grow in the range of 15 to 18 percent in the period from 2010 to 2015, esulting in AUM of INR 15,000 to 17 ,000 billion in 2015. Industry profitability may reduce further as revenues shrink and operating costs escalate. Product innovation is expected to be limited. Market deepening and widening is expected with the objective of increased retail penetration and participation in mutual funds. The regulatory and compliance framework for mutual funds is likely to get aligned with the other frameworks across the financial services sector.
Action Plan for Achieving Transformational Growth There is a need for a collaborative effort across all key stakeholders to harness the future growth potential and reach out to the customer. Given that customer awareness is the pre-requisite for the achievement of the industry growth potential, there is a need for planning, financing and executing initiatives aimed at increasing financial literacy and enhancing investor education across the country through a sustained collaborative effort across all stakeholders, that is expected to result in a massive increase in mutual fund penetration.
AMCs should focus on product innovation and introduction of flexibility in pricing. Public sector thrust into mutual funds distribution and focus on strengthening presence beyond Tier 2 cities will entail training of the public sector employee base through the “Train the Trainer” approach, so that they may be inducted as trainers to support customer awareness campaigns to be facilitated by CII, NISM and AMFI.
Opening up of the public sector branch network in Tier 3 and Tier 4 towns will include India Post, Nationalised Banks, Regional Rural Banks and Cooperative Banks. This will also require a boost to be provided to Investor Service Centres (ISCs) through R&T Agents should be given a thrust. Focus on increasing customer engagement pre and post completion of the investment will be beneficial. CII and AMFI should help to steer the industry vision. The recognition of the Association of Distributors by SEBI would also be beneficial for the long term wellbeing of the industry.
It is proposed that harmonisation of policies across multiple regulatory frameworks in the financial services sector must be taken up on high priority through constitution of a Steering Committee under the aegis of the Ministry of Finance, comprising the Financial Services Regulators for mutual funds and capital markets, pension, insurance, banking and other verticals along with representation from the CBDT. Given that the industry needs to collectively work towards riding over the dynamic and relatively less avourable economic environment at present, the next phase for the industry is likely to be characterised by a stronger focus on customer centricity, cost management and robust governance and regulatory framework – all aimed at enabling the industry to achieve sustained, profitable growth, going forward. © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 3 2. The Indian Mutual Fund Industry – The Current State
The Indian mutual fund industry has evolved from a single player monopoly in 1964 to a fast growing, competitive market on the back of a strong regulatory framework. Growth in AUM in the Indian Mutual Fund Industry (Average AUM in INR Billion) AUM Growth The Assets under Management (AUM) have grown at a rapid pace over the past few years, at a CAGR of 35 percent for the five-year period from 31 March 2005 to 31 March 20091. Over the 10-year period from 1999 to 2009 encompassing varied economic cycles, the industry grew at 22 percent CAGR2.
This growth was despite two falls in the AUM – the first being after the year 2001 due to the dotcom bubble burst, and the second in 2008 consequent to the global economic crisis (the first fall in AUM in March 2003 arising from the UTI split). Note: As of 31 March for each year Source: AMFI data 1 AMFI data 2 AMFI data © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 4 AUM Growth Rate in Select Countries (CAGR for 2004-2008) AUM Base and Growth Relative To the Global Industry
India has been amongst the fastest growing markets for mutual funds since 2004; in the five-year period from 2004 to 2008 (as of December) the Indian mutual fund industry grew at 29 percent CAGR as against the global average of 4 percent3. Over this period, the mutual fund industry in mature markets like the US and France grew at 4 percent, while some of the emerging markets viz. China and Brazil exceeded the growth witnessed in the Indian market. However, despite clocking growth rates that are amongst the highest in the world, the Indian mutual fund industry continues to be a very small market; comprising 0. 2 percent share of the global AUM of USD 18. 97 trillion as of December 20084. Source: ICI Factbook 2009, AMFI data Note: Based on AUM as of 31 December AUM to GDP Ratio for India Source: AMFI data, CSO Note: Based on AUM as of 31 December of each year AUM to GDP Ratio The ratio of AUM to India’s GDP gradually increased , from 6 percent in 2005 to 11 percent in 2009. Despite this however, this continues to be significantly lower than the ratio in developed countries, where the AUM accounts for 20-70 percent of the GDP5. Share of Mutual Funds in Households’ Gross Financial Savings in India Share of Mutual Funds in Household Financial Savings
Investment in mutual funds in India comprised 7 . 7 percent of the gross household financial savings in FY Source: RBI data Note: As of 31 March for every year 2008, a significant increase from 1. 2 percent in FY 2004. The households in India continue to hold 55 percent of their savings in fixed deposits with banks, 18 percent in insurance and 10 percent in currency as of FY 20086. In 2008, the UK had more than thrice the investments into mutual funds as a factor of total household savings (26 percent), than India had in the same time period. As of December 2008, UK households held 61 percent of the total savings in bank deposits, 11. percent in equities and 1 percent in bonds7. Composition of Households’ Gross Financial Savings in India in FY 2008 Source: RBI data 3 ICI data 4 ICI and AMFI data 5 AMFI and CSO data 6 RBI data 7 Datamonitor Report, December 2008 © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 5 Profitability The increase in revenue and profitability in the Indian mutual fund industry has not been commensurate with the AUM growth in the last 5 years.
The AUM grew at 35 percent CAGR in the period from March 2005 to 2009, while the profitability of AMCs – which is defined as PBT as a percentage of the AUM – declined from 24 bps in FY 2004 to 14 bps in FY 20088. Industry Profitability as a percentage of AUM During FY 2004 and FY 2008, the investment management fee as a percent of average AUM was in the range of 55 to 58 bps (small increase to 64 bps in FY 2006) due to the industry focus on the underlying asset mix comprising relatively low margin products being targeted at the institutional segment9.
The operating expenses, as a percentage of AUM, rose from 41 bps in FY 2004 to 113 bps in FY 2008 largely Source: KPMG Analysis based on published financials of AMCs due to the increased spend on marketing, distribution and administrative expenses impacting AMC margins10. Rising cost pressures and decline in profitability have impacted the entry plans of global players eyeing an Indian presence. The growth in AUM accompanied by a decline in profitability necessitates an analysis of the underlying characteristics that have a bearing on the growth and profitability of the Indian mutual fund industry.
Indian Mutual Fund Industry – Industry Investor Mix The Indian Mutual Fund Industry – Key Characteristics Customers The Indian mutual fund industry has significantly high ownership from the institutional investors. Retail investors comprising 96. 86 percent in number terms held approximately 37 percent of the total industry AUM as at the end of March 200811, significantly lower than the retail participation in the US at 82 percent of AUM as at December 200812. Source: SEBI data 8 KPMG Analysis of published financial statements of AMCs with AUM data from AMFI 9 KPMG Analysis 0 KPMG Analysis 11 SEBI 12 ICI © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 6 Out of a total population of 1. 15 billion, the total number of mutual fund investor accounts in India as of 31 March 2008 was 42 million (the actual number of investors is estimated to be lower as investors hold multiple folios)13. In the US, an estimated 92 million individual investors owned mutual funds out of a total population of 305 million14 in 2008.
As per the Invest India Incomes and Savings Survey 2007 of individual wage earners in the age group 18 to 59 years conducted by IIMS Dataworks, only 1. 6 percent invested in mutual funds. Ninety percent of the savers interviewed were not aware of mutual funds or of investing in mutual funds through a Systematic Investment Plan (SIP). The mutual fund penetration among the paid Indian workforce with annual household income less than INR 90,000 was 0. 1 percent. In the last few years, the retail investor participation, in particular, in Tier 2 and Tier 3 towns, has been on the rise aided by the buoyant equity markets.
Growth Rate (Five year CAGR) across Fund Categories Products The Indian mutual fund industry is in a relatively nascent stage in terms of its product offerings, and tends to compete with products offered by the Government providing fixed guaranteed returns. As of December 2008, the total number of mutual fund schemes was 1,002 in comparison to 10,349 funds in the US. Debt products dominate the product mix and Source: AMFI data comprised 49 percent of the total industry AUM as of FY 200915, while the equity and liquid funds comprised 26 percent and 22 percent respectively.
Open-ended funds comprised 99 percent of the total industry AUM as of March 2009. As of December 2008, the US mutual fund market comprised money market funds, equity funds, debt/ bond funds and hybrid funds at 40, 39, 16 and 5 percent of the total AUM respectively16. 13 14 15 16 SEBI ICI, CIA SEBI ICI Factbook 2009 © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 7 While traditional vanilla products dominate in India, new product categories viz.
Exchange Traded Funds (ETFs), Gold ETFs, Capital Protection and Overseas Funds have gradually been gaining popularity. As of March 2009, India had a total of 16 ETFs (0. 3 percent of total AUM) Number of Distributors by Category Registered Annually by AMFI while the US had a total of 728 ETFs as of December 200817. Markets While the mutual fund industry in India continues to be metro and urban centric, the mutual funds are beginning to tap Tier 2 and Tier 3 towns as a vital Source: AMFI data Note: Data as of 31 March for every year except for December 2002 omponent of their growth strategy. The contribution of the Top 10 cities to total AUM has gradually declined from approximately 92 percent in 2005 to approximately 80 percent currently18. Distribution Channel Mix Distribution Channels As of March 2009, the mutual fund industry had 92,499 registered distributors as compared to approximately 2. 5 million insurance agents19. The Independent Financial Advisors (IFAs) or Individual distributors, corporate employees and corporates comprised 73, 21 and 6 percent respectively of the total distributor base.
Banks in general, foreign banks and the leading new private sector banks in particular, dominate the mutual fund distribution with over 30 percent AUM share. National and Regional Distributors (including brokerdealers) together with IFAs comprised 57 percent of the total AUM as of 2007 The public sector banks are . gradually enhancing focus on mutual fund distribution Source: CII Mutual Fund Summit 2008 quoted from Cerulli Associates Growth in the Number of AMCs in India to boost their fee income20. Industry Structure The Indian mutual fund industry currently consists of 38 players that have been given regulatory approval by SEBI.
The industry has witnessed a shift has changed drastically in favour of private sector players, as the number of public sector players reduced from 11 in 2001 to 5 in 2009. Source: AMFI data 17 AMFI data, ICI Factbook 2009 18 Industry discussions 19 AMFI and IRDA data 20 CII Mutual Fund Summit 2008 quoted from Cerulli Associates 21 AMFI data © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 8 Market Share of Players as of March 2009
The public sector has gradually ceded market share to the private sector. Public sector mutual funds comprised 21 percent of the AUM in 2009 as against 72 percent AUM share in 200122. The industry concentration has been stagnant in the four-year period from 2005 to 2008; the top 5 players comprising 50-52 percent of industry AUM. However, as of March 2009, the share of Top 5 players increased to 58 percent, as against 38 percent in the US. The AUM share of the Top 10 players has consistently been in the vicinity of 75 percent. 23 The mutual fund houses based on product portfolio and Source: AMFI data istribution strategy, the key elements of competitive strategy, can be segmented into three categories: Market Share Trend of the Top 5 and Top 10 players in India • The market leaders having presence across all product segments • Players having dominant focus on a single product segment – debt or equity • Players having niche focus on an emerging product category or distribution channels. The market leaders have focused across product categories for a more diversified AUM base with an Source: KPMG analysis based on AMFI data equitable product mix that helps maintain a consistent AUM size.
Although the Indian market has relatively low entry barriers given the low minimum networth required to Administrative & Other Expenses as a percentage of AUM venture into mutual fund business, existence of a strong local brand and a wide and deep distribution footprint are the key differentiators. Operations The Indian mutual fund industry while on a high growth path needs to address efficiency and customer centricity. AMCs have successfully been using outsourced service providers such as custodians, Registrar and Transfer Agents (R&T) and more recently, fund accountants, so that mutual funds can focus on
Source: KPMG analysis based on public financials of AMCs 22 AMFI data 23 AMFI data © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 9 core aspects of their business such as product development and distribution. Functions that have been outsourced are custody services, fund services, registrar and transfer services aimed at investor servicing and cash management. Managing costs and ensuring investor satisfaction continue to be the key goals for all mutual funds today.
However, there is likely to be scope for optimising operations costs given the trend of rising administrative and associated costs as a percentage of AUM. Regulatory Framework The Indian mutual fund industry in terms of regulatory framework is believed to match up to the most developed markets globally. The regulator, Securities and Exchange Board of India (SEBI), has consistently introduced several regulatory measures and amendments aimed at protecting the interests of the small investor that augurs well for the long term rowth of the industry. The implementation of Prevention of Money Laundering (PMLA) Rules, the latest guidelines issued in December 2008, as part of the risk management practices and procedures is expected to gain further momentum. The current Anti Money Laundering (AML) and Combating Financing of Terrorism (CFT) measures cover two main aspects of Know Your Customer (KYC) and ‘suspicious transaction monitoring and reporting’.
The regulatory and compliance ambit seeks to dwell on a range of issues including the financial capability of the players to ensure resilience and sustainability through increase in minimum networth and capital adequacy, investor protection and education through disclosure norms for more information to investors, distribution related regulations aimed at introducing more transparency in the distribution system by reducing the information gap between investors and distributors, and by improving the mechanism for distributor remuneration.
The success of the relatively nascent mutual fund industry in India, in its march forward, will be contingent on further evolving a robust regulatory and compliance framework that in supporting the growth needs of the industry ensures that only the fittest and the most prudent players survive. © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 10 3. Challenges and Issues Context Setting
While the Indian mutual fund industry has grown at an impressive rate in the last few years, the recent developments of the past few months triggered by the global financial crisis have impacted the fortunes of the industry resulting in AUM decline, adversely impacting the revenue and profitability. KPMG, through discussions with the industry participants, has attempted “Mutual funds are still sold, not bought. ” – A large national distributor to identify and highlight some of the key issues and challenges being faced by the industry participants that are preventing the industry from harnessing its true growth potential. 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 11 “Perhaps most frustrating has been the reality that mutual funds have made relatively little impact in attracting new household financial savings. ” – A leading mutual fund in India Low Levels of Customer Awareness Low customer awareness levels and financial literacy pose the biggest challenge to channelising household savings into mutual funds.
IIMS Dataworks data released in 2007 establishes that low awareness levels among retail investors has a direct bearing on the low mutual fund offtake in the retail segment. The general lack of understanding of mutual fund products amongst Indian investors is pervasive in metros and Tier 2 cities alike and majority “Investor education and awareness has made limited inroads in increasing customer investments in mutual funds Efforts across AMCs and distributors have largely remained disjointed. ” – A mid-sized mutual fund in India f them draw little distinction in their approach to investing in mutual funds and direct stock market investments. A large majority of retail investors lack an understanding of risk-return, asset allocation and portfolio diversification concepts. Low awareness of SIPs in India has resulted in a majority of the customers investing in a lump sum manner. Limited Focus on Increasing Retail Penetration The Indian mutual fund industry had limited focus on building retail AUM and has only recently stepped up efforts to augment branch presence in Tier 2 and Tier 3 towns.
Players have historically garnered AUM by targeting the institutional segment that comprises 63 percent AUM share as at March 2008. Large ticket size, tax arbitrage available to corporates on investing in money market mutual funds, easy accessibility to institutional cutomers concentrated in Tier 1 cities are the factors instrumental in mutual fund houses focussing on the institutional segment. Building retail AUM requires significant distribution capability and a wide footprint to be able Most AMCs have focused on growing AUMs primarily through institutional clients which is much easier than penetrating the retail base. ” – A large national distributor “Investor education by AMCs is primarily on focused on metros. ” – A large IFA to penetrate into Tier 2 and Tier 3 towns, which AMCs have recently started focusing on. Institutional AUM, however, makes the industry vulnerable to the possibility of sudden redemption pressures that impact the fund performance. “AMCs must focus on investor education so that they can challenge distributors. ” – A large AMC
Limited Focus Beyond the Top 20 Cities The mutual fund industry has continues to have limited penetration beyond the top 20 cities. Cities beyond Top 20 only comprise approximately 10 percent of the industry AUM as per industry practitioners. The retail population residing in Tier 2 and Tier 3 towns, even if aware and willing, are unable to invest in mutual funds owing to limited access to suitable distribution channels and investor servicing. “We need to focus beyond the Top 20 cities to increase retail penetration. ” – A leading national distributor
The distribution network of most mutual fund houses is largely focused on the Top 20 cities given the high cost associated with deeper penetration into Tier 2 and Tier 3 towns. However, some of the mutual fund houses have begun focussing on cities beyond the Top 20 by © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 12 “Fees should only be on trail basis so that advisors are compensated based on ongoing advice and service provided. – A large IFA building their branch presence and strengthening distribution reach through non-branch channels. Limited Innovation in Product Offerings The Indian mutual fund industry has largely been product-led and not sufficiently customer focused. The popularity of NFOs triggered a proliferation of schemes with a large number of non-differentiated products. The industry has had a limited focus on innovation and new product development, thereby catering to the limited needs of the customer.
Products that cater specifically to customer life stage needs such as education, marriage, and housing are yet to find their way in the Indian market. Despite the regulations for Real Estate Mutual Funds (REMF) being “There is a tendency to push select products during specific economic cycles. Debt products are seldom sold during a stock market boom. ” – A large regional distributor “AMCs must focus on investor education so that they can challenge distributors. ” – A large AMC introduced in 2008, the market is still awaiting the first REMF launch.
Further, relatively nascent product categories viz. multi-manager funds that are among the most popular hybrid funds globally have not grown in India owing to the prevailing taxation structure. The Indian mutual fund industry offers limited investment options viz. Fee structures in the US Mutual Fund Market – A case study In the US mutual fund market, financial advisors are professionals who help investors define their investment goals, select suitable funds based on risk appetite, and provide ongoing advice and service.
These financial advisors are compensated for their services, in part, through a specific fee, known as a 12b-1 fee, which is included in a fund’s expense ratio. In addition, no-load funds are sold directly to investors or are sold to investors through financial advisors who charge investors separately for the investment advice and service provided, thereby providing flexibility to the investor, based on the level of advice and service sought. Advisors are compensated for providing these services through a combination of front-end or back-end loads and 12b-1 fees.
Investors who opt not to use a financial advisor or those who pay the financial advisor directly for services rendered, purchase no-load funds, which have neither front – nor back-end loads and have either low or no 12b-1 fees. Source: ICI capital guarantee products for the Indian investors, a large majority of whom are risk averse. The Indian market is still to witness the launch of green funds, socially responsible investments, fund of hedge funds, enhanced money market funds, renewable and energy/ climate change funds. Limited Flexibility in Fees and Pricing Structures
The fee structure in the Indian mutual fund industry enjoys little flexibility unlike developed markets where the level of management fees depend on a variety of factors such as the investment objective of the fund, fund assets, fund performance, the nature and number of services that a fund offers. While the expenses have continuously risen, the management fee levels have remained stagnant. Distributors are compensated for their services through a fixed charge in the form of entry load and additional fees as considered appropriate by the AMC.
Regardless of the quality of advice and service provided, the commission payable by the mutual fund customer to the distributors is fixed. Limited Customer Engagement Mutual fund distributors have been facing questions on their competence, degree of engagement with customer and the value provided to the customer. © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 13 In the absence of a framework to regulate distributors, both the AMFI must focus on defining the industry vision and long-term strategic direction. ” – A mid-sized AMC distributors and the mutual fund houses have exhibited limited interest in continuously engaging with customers post closure of sale as the commissions and incentives had been largely in the form of upfront fees from product sales (although trail commissions have also been paid in limited instances regardless of the service rendered). As a result of the limited engagement, there have been rising instances of mis-selling to customers. Valuations in the Indian mutual fund industry should be based on EBITDA multiples and not on the basis of AUM alone. ” – A large AMC Limited Focus of the Public Sector Network on Distribution of Mutual Funds Public sector banks with a large captive customer base, significant reach beyond the Top 20 cities in semi-urban and rural areas, and the potential to build the retail investor base, have so far played a very limited role in mutual funds distribution. The India Post network operating the largest postal network in the world majority of which is in rural areas, is stated to have 250 post offices PAN card being made mandatory is a deterrent to industry growth. ” – A large national distributor selling mutual funds of five AMCs only; further most of the post offices selling mutual funds are located in Tier 1 and Tier 2 cities which are already been catered to, by national level and other distributors24. India Post with its customer base of 170 million account holders and branch network of over 154,000 branches, doubling the size of all bank branches put together is a formidable channel which has been under utilised to date for mutual fund distribution25.
The postal network also serves as a means to facilitate inclusive and equitable growth to all regions and social groups by providing them with access to financial products such as mutual funds. Further the credibility enjoyed by the Nationalised Banks, Regional Rural Banks and Cooperative Banks in the rural hinterland has not been fully leveraged to target the retail segment. “AMCs do not contribute to training costs for distributors. ” – A mid-sized national distributor “Manufacturers need to increase the level of engagement with customers and play a much larger role beyond sales. ” – A small AMC
Multiple Regulatory Frameworks Governing Financial Services Sector Verticals The regulatory and compliance requirements vary across verticals within the financial services sector specifically mutual funds, insurance and pension funds each of which are governed by an independent regulatory framework and are competing for the same share of the customer’s wallet. The mutual fund industry lacks a level playing field in comparison with other verticals within the financial services sector. © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.
All rights reserved. Page 14 The mandatory PAN card requirement for investing in mutual funds is perceived to restrict significant potential of the mutual fund industry in being able to tap small ticket investors from investing in mutual funds. On the other hand, ULIPs which are deemed to be competing products do not have the mandatory PAN requirement. While the payment for investment into mutual funds can be made only through banking facilities, the purchase of ULIPs can be undertaken through cash.
The recently introduced NPS regulations requiring the AMCs to create a separate legal entity for pension funds management has created an additional cost structure for the mutual fund players. Outsourcing funds management in excess of INR 80 billion by insurance companies is not permitted and thus restricts an additional revenue opportunity for the mutual fund industry. In summary, the challenges and issues faced by the Indian mutual fund industry will need to be addressed at the earliest to ensure long term sustained, profitable growth of the industry. 24 India Post 25 India Post 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 15 4. Voice of the Customer The endeavour of mutual fund investments is to leverage professional and prudent fund management techniques and thereby maximise returns for the investors while minimising risk. While mutual funds are often the preferred avenue for investment over direct investments into the capital markets by risk averse investors, customers have had widely varying experiences with purchase of mutual funds.
Thus, it is critical for the industry to understand the perspectives of Indian investors so as to use their inputs to further enhance the customer experience with mutual funds. Methodology To understand the voice of the Indian investors, CII-KPMG conducted an investor survey across the Top 10 cities in India in May 2009. As part of this survey, CII-KPMG facilitated interviews with a large representative sample of population from diverse backgrounds (education, age, occupation and gender) to understand their preferences and perspective on investment in mutual funds. 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 16 Reasons provided by Survey Respondents for Not Investing in Mutual Funds The survey revealed several interesting observations and resulted in a long customer’s wish-list pointing to the expectations from the AMCs, distributors, service providers and regulators. While a significant portion of customers are aware of and also invest in mutual funds, there was a diverse set of views obtained, both negative and positive.
This warrants a need to immediately tackle some of the negative perceptions and capitalise on the positive ones. Impediments to Mutual Fund Investing Customers believe that the mutual fund industry falls short of expectations in meeting their needs at time of economic uncertainty and market volatility. The survey has highlighted several reasons that respondents have cited for not buying mutual funds. Some of the prominent challenges highlighted by the respondents have been listed below.
Availability of a large number of mutual funds schemes makes investment decision complex and difficult The Indian investor witnessed significant rise in New Fund Offers (NFOs) over the last two to three years from AMCs seeking to augment AUM and diversify product basket. India has over 979 mutual fund schemes resulting in a total AUM of INR 4,173 billion as on 31 March 200926. The ratio of the assets per scheme is one of the highest in the world. Given that there is a plethora of options with limited differentiation across mutual fund schemes, the respondents perceive a difficulty in investing in mutual funds in the absence of quality advice.
Hence, AMCs need to design simple products that the target segment can easily understand and also realign their product portfolio to merge/ close schemes with overlapping objectives. Complicated KYC norms restrict potential investors In addition to the PAN card requirement, for an investment amount of INR 50,000 and above in mutual funds, the customers are required to procure KYC acknowledgement. This requires submission of several documents and extensive paper-work. The respondents to the survey expressed difficulty in understanding the
Source: CII-KPMG Survey in May 2009 “I want to invest in mutual funds, but I do not have a PAN card, can I invest without it? ” – Salaried person Tier 1 city Not an investor in mutual funds 26 AMFI data © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 17 “Last time I wanted to invest some money in MF, the fund house asked me for so many documents that I got totally confused and wondered why I should share so much with them? – Businessman Tier 1 city Not an investor in mutual funds complex terminology and the paperwork involved in mutual fund investing. Further, this regulatory directive is viewed negatively by potential customers as investments in insurance products can be undertaken without the requirement for a PAN card. Hence, there is urgent need for the Government to facilitate harmonisation of policies and processes across different verticals in the financial services sector and to simplify documentation that could thereby ease the process of mutual fund investments for retail customers.
Banks and IFAs remain the preferred channel given that investors trust them for their advice and after sales service. However, the survey respondents were not satisfied with the quality of advice. Banks and IFAs are the preferred channel for investing in mutual funds. Customers expressed confidence in banks given the long standing relationship and the trust built with the banks over the years. Similarly, the customers have become accustomed to dealing with IFAs to seek independent advice on a wide range of investment and financial planning issues.
This comfort is expected to play a key role in according priority to the growth of the IFA channel. IFAs have demonstrated flexibility in providing customised offerings to the customers at the household level. It is important to note that an overwhelming majority of the customers have not been satisfied with the quality of advice being provided to them by the advisors. Some customers are of the view that the IFAs are less qualified and do not adopt a holistic approach to financial planning. In some cases, customers have reported instances of mis-selling that has affected the performance of their portfolios significantly.
Hence, it is imperative for distributors to re-look at their strategy for financial planning and dispensing advice to customers. After sales service and ongoing follow up have been identified by customers as a key differentiator in assessing the capabilities of distributors. Channels Preferred by Survey Respondents for Investing in Mutual Funds Preferred Channels for Investment Source: CII-KPMG Survey in May 2009 “I had some money in PPF and wanted to invest in something which gives good returns with balanced risk, so I chose MF, it is working for me” – Salaried Person Tier 1 City Investor in Mutual Funds
Drivers for Investment in Mutual Funds The factors that can incentivise potential customers to commence and gradually increase their investment in mutual funds are discussed below. © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 18 Reasons provided by Survey Respondents on Selection of Mutual Funds for Investment Purposes Reasons for selection of Mutual Funds
Investment in Mutual Funds is attractive to customers owing to tax benefits The tax benefits associated with investment in mutual funds is the key drivers for customers. Customers consider mutual funds as a medium of ensuring financial independence and security. Since most mutual fund schemes carry easy liquidity options, customers believe that mutual funds are a avenue of savings thereby eliminating the need for borrowing money in case of financial exigencies. Liquidity for the future is deemed to be of utmost importance in making any investment decision.
Consistency in fund performance and brand equity influence customers to make relevant selection of mutual fund schemes Customers believe that fund performance is necessary but is not a sufficient condition to drive their selection of mutual fund products. Selection of mutual funds by a customer is a function of both the fund performance and brand equity of the fund house. Customers are of the view that the key differentiator at the time of selection of a fund is the positive outlook on performance even if the numbers do not reveal a spectacular historic performance.
The brand equity of a mutual fund includes factors like perception of the brand capability drawn from its performance in other sectors. Simplification of Processes to Increase the Quantum of Investments Customers obtain the requisite confidence in their investment process when distributors explain the concepts and the meaning of key terms used in mutual fund application forms in simple terms. Further, this reinforces confidence in the distributor’s capabilities and quality of advice provided that facilitate the decision process for investment in a mutual fund scheme.
Customers also expressed the view that a single common application form could be used for all mutual fund investments across multiple mutual fund houses. Simplifying the process for redemption of funds was also identified as a means for further increasing investments in mutual funds. Source: CII-KPMG Survey in May 2009 “I find it really difficult to understand different forms of different fund houses, can I have a single form which can be centrally used for all fund houses. ” – Salaried Person Tier 1 City Investor in Mutual Funds My investment in mutual fund provides me tax benefit as well as a regular source of attractive returns” – Salaried Person Tier 1 City Investor in Mutual Funds © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 19 “ Customers’ Wish-list from Mutual Funds, Distributors, Regulator and Government – In the Words of Customers27 Mutual Fund Products • I want protective products with guaranteed income and good absolute returns. As a retired person, I want more debt funds options with a safe mechanism of regular saving along with the varied pension options. • I want assured returns schemes that are a mix of risk-free and high-risk portfolio where I can invest small sums of money. • I want a clear and easy explanation of various schemes. Funds Management • I want to listen to fund managers’ views on outlook for various sectors, industry performance, fund performance, etc. but have never been invited by any fund house for this. AMCs should not depend on the Fund Manager but its process for the success of their products. Investor Servicing • I want easy access to the Fund House for direct subscription since I do not want to pay entry load. • I want better service from the fund house in terms of NAV updates through weekly SMS alerts so that I know the value of my investments. • I want all the services at my door step – right from getting help in filling in the application form to depositing a cheque for my investments. We want to interact with more knowledgeable people at the call centers to attend to our complaints from a technical perspective, and not just to handle routine operational level problems. • AMCs should send a report to me on my investment status and performance on a timely and regular basis • I believe agents commission should be linked to investor satisfaction and attractiveness of the fund suggested, which should be payable in phases, depending upon the success of the advice provided • Please reduce and simplify the documentation required and the processes involved and help me to understand the purpose for which this will be used.
Investment Advice • Since I make my own investment decisions without relying on anyone’s advice, I want a single platform for transacting and performance monitoring, to track my mutual fund investments across various AMCs. • I want objective advice that’s best suited to my needs and which is not driven by commissions received by my advisor. • As long as the fund house pays the commission to the advisor, there is always a conflict. How can anyone provide unbiased advice if they are paid by the fund house for advising me?
This ensures that the advisor is acting in the favor of the fund house and is not driven by my interests and needs. Regulator Intervention • Can SEBI provide me with Certification of Fund managers, to assure me of high quality management of my funds? • I want SEBI to provide me with a list of registered distributors on their website since I do not know if my advisor is certified and qualified to advise me. • Can SEBI put in place a mechanism through which we can rely upon the advice provided by the Mutual Fund agent? My advisor has given me incorrect advice owing to which I have lost money. How do I ensure that he gets penalised for the loss caused with his incorrect advice? Tax Benefits • Why am I required to pay Securities Transaction Tax? • The Government must provide a favourable tax regime for Fund of Funds that implies extending tax benefits to investors and also to the funds. • The Government must provide tax sops to encourage investment in equity (including overseas equity) as a long term saving and to encourage nvestments in the infrastructure sector (debt as well as equity); tax sops should also be extended to schemes investing in these areas as well. 27 CII-KPMG Survey on Mutual Funds, May 2009 © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. “ • Why should I be required to pay long-term capital gain tax on my debt funds when I am not required to pay this on equity funds? Page 20 5. Future Outlook in a Dynamic Environment
This section contains a summary of the expected drivers for future growth, expected industry growth projections and overall future outlook across various dimensions – customers, markets, products, distribution channels and regulatory frameworks. Growth Drivers Although several macroeconomic and demographic factors affect the growth of the industry, the key underlying driver for all the categories of funds is the key economic indicator – the GDP growth rate. The growth drivers for customer segments have been listed in the table below along with the expected impact of each on the AUM. 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 21 Customer Segment Key Growth Drivers Retail Segment • Rising disposable incomes and savings • Favourable demographics such as increasing proportion of working population (20-59 years) and increasing urbanisation resulting in increased levels of financial savviness • Innovations in distribution • Increased awareness levels • Quality financial planning
Expected Impact • Increase in disposable incomes and household financial savings may result in households seeking alternate avenues for investments to yield higher returns with reasonable risk • Favourable demographics like urbanisation and a relatively young population having an increased risk appetite, are likely to save more and seek to invest a higher proportion of those savings in market-linked instruments such as mutual funds • Distribution innovations are expected to increased mutual fund penetration specifically in Tier 2 and Tier 3 towns thereby expanding the mutual fund customer base • Improved awareness levels and enhanced financial literacy is expected to aid the understanding of mutual fund products • Appropriate asset allocation and potential for wealth creation Institutional Segment • Rising corporate earnings • Maturing capital markets • Interest rate cycle • Call money market rates • Corporate debt and commercial papers • Increased demand for sophisticated treasury management products • A better economic situation in the country is likely to ensure a steady fall in the interest rates Our Point of View on the Future Outlook28 This section on the “Point of view on the Future Outlook” is based on our discussions with key stakeholders and expected trends in the Indian mutual fund industry, based on the global experiences.
Industry AUM is likely to continue to grow in the range of 15 to 25 percent from the period 2010 to 2015 Projected AUM Growth from 2010 to 2015 Scenario 1: Favourable growth scenario with quick economic revival In the event of a quick economic revival and positive reinforcement of growth drivers identified, KPMG in India is of the view that the Indian mutual fund industry may grow at the rate of 22-25 percent in the period from 2010 to 2015, resulting in AUM of INR 16,000 to 18,000 billion in 2015. Key growth drivers for this scenario include: • Increased retail investor participation with a preference for mutual funds over other asset classes perceived to be more risky. This could result in the fulfilment of growing financial aspirations, enabled by rising disposable incomes and increased financial savings Source: KPMG analysis • Innovations in distribution driven by increase in the number of certified IFAs and banks selling mutual funds focusing on Tier 2 and Tier 3 towns 8 Discussions with key industry stakeholders and customers © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 22 Scenario 2: Relatively lower growth scenario with slow economic revival • Increase in institutional participation triggered by rising corporate revenues with increased economic activity. In the event of a relatively slower economic revival resulting in the identified growth drivers not reaching their full potential, KPMG in India is of the view that the Indian mutual fund industry may grow in the range of 15-18 percent in the period from 2010 to 2015, resulting in AUM of INR 15,000 to 17 ,000 billion in 2015. Key factors driving the growth inspite of the slow revival of the economy include: Source: KPMG analysis Incremental increase in retail investor participation owing to limited focus beyond Tier 2 towns and limited efforts to draw risk averse customers of traditional products under the fold of mutual funds • Tightening of liquidity leading to better yields on instruments liquid funds invest in, thereby driving investments from the institutional investors. Industry profitability may reduce further as revenues shrink and operating costs escalate Industry profitability is expected to gradually reduce as revenues of AMCs shrink due to focus on low margin products to attract risk averse investors, and also as operating costs escalate due to the focus on penetrating retail population beyond Tier 2 cities. Decline in investment management fees is expected as risk averse customers prefer investments in debt products • Increase in distribution costs as players attempt to set up their own branch presence in smaller towns • Existing players are likely to review business strategy and explore exit/ mergers in case of no significant competitive advantage, thereby resulting in industry consolidation • Competition is expected to intensify further with the entry of global players who are facing stagnant growth in global markets. This is expected to result in a fall in market shares of the Top 10 players and result in a further squeeze on margins • Co-existence of large players with diversified portfolios and some niche plays expected. © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 23
Product innovation is expected to be limited • High margin products such as equity and select debt products likely to continue to contribute a significant share of industry AUM • Flexibility in product pricing by AMCs expected to be permitted based on the type of services offered • Emerging product categories such as ETFs, Multi manager funds, REMFs, outcome-oriented funds such as principal-protected, taxmanaged and inflation-indexed funds, expected to have marginal share of AUM inspite of rapid growth. • Possibility of introducing mandatory rating for mutual fund products through Rating agencies likely to increase investor confidence • Efforts expected to be undertaken for developing a well structured and well managed regulated, debt market which should increase in depth. Market deepening and widening is expected with the objective of increased retail penetration and participation in mutual funds Retail Segment • Increased ocus on growing investor awareness and increasing financial literacy is expected, resulting in an increase in the contribution of the retail segment to the industry AUM in the range of 46-48 percent by 2015, from 36 percent as of 2008 as mentioned earlier • Domestic players expected to tap the overseas markets to grow their AUM through alliances with global players • HNIs and Mass Affluent segments may dominate the retail segment • Average holding period for mutual funds and average ticket size of investments in mutual funds likely to remain unchanged. Institutional Segment • Institutional segment likely to witness the emergence of a new category of SMEs seeking advice on managing their funds.
Market focus • Greater participation expected from Tier 2 cities and Tier 3 towns, including rural centres • Share of top 10 cities in total AUM expected to decline as retail investors from smaller cities, towns and rural areas join the mutual fund fold. © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 24 Banks • The public sector network of nationalised banks and post offices likely to increase their focus on the distribution of mutual funds • Entry of public sector banks as mutual fund manufacturers expected to increase their focus on mutual fund distribution • Private banks providing financial advice to HNIs expected to marginally increase their market share.
IFAs • IFAs expected to emerge as a dominant channel in a scenario of robust stock market growth, focusing on increasing penetration, and will therefore have to focus on initiatives to develop and support this channel (for example, recruitment and training support). Other channels • India likely to witness the entry of global fund super-markets enabled by regulatory changes • Cooperative sector, though beset with internal administrative issues, likely to emerge as another channel which should be tapped by Mutual Funds • Tapping the large network of NGOs, recognised by local authorities to interact and reach out to the lower middle class and poorer segments of population to increase mutual fund penetration • Distributors likely to explore the possibility of innovations such as a common online platform and the usage of debit and credit cards for transactions.
Massive expansion is expected in the mutual fund distribution network • The public sector network of nationalised banks and post offices are likely to increase their focus on the distribution of mutual funds • Entry of public sector banks as mutual fund manufacturers are expected to increase their focus on mutual fund distribution • IFAs are expected to emerge as a dominant channel focused on increasing penetration, and will therefore have to focus on initiatives to develop and support this channel (for example, recruitment and training support) • IFA channels are expected to witness growth at a faster pace than banks • Private banks providing financial advice to HNIs expected to marginally increase their market share © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 25 • Distributors likely to explore the possibility of innovations such as a common online platform and the usage of debit and credit cards for transactions • AMCs are expected to invest in channel innovation such as Mobile and Internet services. Mobile telephony enabling mobile transactions for the purchase and sale of mutual funds and SMS-based services is expected to revolutionise the industry.
The regulatory and compliance framework for mutual funds is likely to get aligned with the frameworks across the financial services spectrum • Regulators across Financial services spectrum viz. mutual funds and capital markets, pension, insurance and banking expected to work towards harmonisation of policies, with support from industry bodies like the CII and the respective industry associations • Thrust of the regulatory and compliance framework expected to be on enhancing resilience and sustainability, investor protection and good governance going forward. In summary, the Indian mutual fund industry is expected to witness rapid growth in AUM over the next few years.
The industry, however, faces the challenge of achieving sustained profitable growth while increasing retail penetration and expanding the reach of mutual funds into rural areas. © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 26 6. Action Plan for Achieving Transformational Growth Key stakeholders of the mutual fund industry Based on discussions with key industry stakeholders, KPMG in India is of the view that opportunities exist for surpassing the growth potential of the Indian mutual fund industry and making the industry more profitable CII hrough a collaborative effort across all the key stakeholders to reach out to the customer, viz. AMCs, distribution channel partners, service providers such as R&T Agents, custodians and fund accountants, CII, AMFI, the regulator SEBI and the media, among others. This section seeks to identify and prioritise key initiatives that are required to be undertaken for the Indian mutual fund industry to grow and effectively compete in a dynamic environment. Source: CII-KPMG analysis © 2009 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Page 27 Massive Increase in Mutual Fund Penetration Through Customer Awareness
Campaigns Given that customer awareness is the pre-requisite for the achievement of the industry growth potential, there is a need for planning, financing