UTI Mutual Fund will provide training to nearly 5,000 foundation level advisors to strengthen its footprint beyond the top 15 cities. Plans are afoot to launch investor education programmes in 3,000 blocks and sub-districts across the country by 2013-14.

According to Debashish Mohanty, country head-retail and executive vice president of UTI, the move will help the company boost its market share in these towns. Nearly 30 per cent of the company’s total business comes from beyond the top15 cities at present.

“There is a huge untapped potential in the smaller cities in so far as converting savings to investments is concerned,” Mohanty told Business Line on the sidelines of a financial advisor forum organised by CNBC TV 18 and UTI Mutual Funds. UTI MF has tied up with National Institute of Securities Market (NISM) to provide training to 5,000 entry level advisors by June 30, 2013.

In a bid to encourage asset management companies to expand investment penetration beyond top 15 cities, Securities and Exchange Board of India (SEBI) recently allowed fund houses to charge 30 basis points more as expense ratio.

The additional 30 basis points could be charged by fund houses bringing in 30 per cent of the inflows of a scheme from beyond these cities. The top 15 cities currently contribute nearly 87 per cent to the country’s total assets under management.

“In order for us to charge this additional total expense ratio (TER) of 30 basis points, our incremental business should be more than 30 per cent from these towns,” he said.

This apart, the fund house will also focus on the top 15 cities, which according to Mohanty, are still not saturated.


(This article was published on February 11, 2013)
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