How MFDs can diversify their income with Mutual Fund Software? |
Posted: May 31, 2023 |
A distributor earns money through commissions when they sell mutual funds to investors. And mutual funds are the biggest source of income for 75% of the MFDs in terms of income percentage. Mutual funds account for 50% of distributors’ income in proportion. But relying solely on the commissions from mutual funds can be detrimental to a distributor financially. How you may ask. Here are some numbers in terms of challenges:
How do your deal with these challenges? The answer is Income diversification. In this blog, we will learn about what is income diversification, its benefits, and an effective way to diversify your revenue. What exactly is income diversification? It's about identifying new ways to earn revenue while reducing the dependence on one source of income. When you expand your revenue streams, you increase your income beyond just commissions from mutual fund sales. You can spread out your risk and build a stronger financial base by diversification. Even if one income stream stops, the others can continue to maintain your financial well-being. Why is the importance of revenue diversification? Have you ever heard the saying, "Don't put all your eggs in one basket," which advices keeping these eggs in various baskets? If one basket is harmed, it may be able to save your other eggs. Let me explain it with an example. Consider that you are invested in mutual funds. You have bought a single type of mutual funds scheme, say equity. During market volatility, if the stock market goes down then, there is the possibility that you could lose your money. This is why it’s important to invest in a mix of asset classes such as debt, equity, or hybrid. Similarly, it’s important to have multiple streams of income to support yourself financially in times of job loss or industry changes Why you should diversify your income? Risk Mitigation: As a mutual fund distributor, income diversification is vital because it helps mitigate the risks associated with relying solely on commissions from mutual fund sales Higher Income Stability: When you diversify your sources of income, you can continue to make money even when the market is down. You can protect yourself from unexpected drops in mutual fund sales by reducing your reliance on a single source of income. Reduced Risk: By diversifying your portfolio, you can lessen the risks brought on by market volatility and regulatory changes. You can adjust to shifting investor preferences and reduce potential losses by providing various investment products and services. Increased Customer Satisfaction: Through diversification, you can better meet the specific requirements and preferences of your customers. You can raise customer satisfaction levels and forge closer ties by offering extra services and educational initiatives. Growth Possibilities: By diversifying your revenue streams, you can reach new customers and adapt to their changing demands. Additionally, diversifying into different investment products can expand your consumer base and revenue potential. You can grow your company and achieve greater levels of success thanks to this growth. What is the way to diversify your income? REDVision software has integrated with the peer-to-peer (P2P) lending platform, LenDenClub, Mutual Fund Distributors (MFDs) have the chance to diversify their revenue sources. This integration may have a number of advantages and open up new opportunities for making money. Now let's get into the specifics: With the Best Mutual Fund Software in India, MFDs can:
It is a comprehensive mutual fund distribution software. MFDs can use it to improve the services they provide with its features, which include client onboarding, investment tracking, reporting, and communication tools. Mutual Fund Distributors (MFDs) can explore new ways to make money with this integration, LenDenClub, a peer-to-peer (P2P) lending platform. It opens up exciting possibilities for MFDs to diversify their revenue sources and offer clients more investment options. But how exactly it works? This P2P platform connects borrowers with lends digitally. It offers individuals or businesses directly to lend or borrow money without a financial intermediary like banks. Mutual funds distributors can offer their clients a new investment opportunity in terms of diversification. Clients can invest their money in different schemes with different tenures and get up to 12% returns p.a. Distributors can earn a good brokerage commission from the investment of their clients. What are the benefits of this integration? Our mutual software for distributors offers various benefits with this integration.
Conclusion As a result, MFDs have the chance to expand their service offerings, improve customer satisfaction, and tap into the expanding P2P lending market with our mutual fund software. MFDs can offer clients a comprehensive investment experience by combining the benefits of mutual funds and peer-to-peer lending onto a streamlined, technologically advanced platform.
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