How to Sell Mutual Funds to Clients?

Selling mutual funds to clients requires a thorough understanding of their needs and goals. Armed with this information coupled with a holistic knowledge about the funds and their working can help you easily sell them. If you are in the business of selling mutual funds, this article will help you to ease operations further.

Before you sell a mutual fund , it’s crucial to have a holistic view of your client’s goals which he/she seeks to achieve in the short and long term. An overview of the objectives your client wants to achieve, can help suggest the right fund.While liquid funds can be an ideal choice for short-term goals like building an emergency corpus, going on a vacation, etc., equities can help achieve long-term objectives like accumulating money for children’s higher education and retirement.

This is another important parameter, knowing which can help you sell the right fund. Risk appetite refers to the risk tolerance of your client. It varies across individuals. If your client has a high-risk appetite and can stomach volatility, you can suggest them to opt for equity funds. On the other hand, if he/she has a low-risk tolerance and gets worried even at the slightest hint of volatility, then debt funds can be an ideal choice. For moderate risk-takers, aggressive hybrid funds , which invest in a mix of equities and debt, can be a prudent option. Investable surplus and market experience, among others, shape risk tolerance.

This refers to the time your client is willing to remain invested. In other words, it’s the time frame of investment. If your client has a long investment horizon, above 5 years, then you can suggest equity funds, which yield the desired results only if one is invested for the long haul.On the other hand, if the investment horizon is 5 years or less, then you can suggest aggressive hybrid funds. Alternatively, if the time frame is less than a year, then liquid funds are a safe choice. The final word Providing the much-needed diversification, disciplined investments in mutual funds can help build a sizeable corpus for accomplishing various life goals. However, make sure your clients know the associated risks of investing in mutual funds.At the same time, do help them pick up a fund which aligns with their life goals and has a consistent long-term track record.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.