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39. Explain the role of agents in the distribution of Mutual Fund scheme.
Product innovation or development has become the order of the day for Mutual Fund players to stay ahead in a highly competitive environment . Increasing commoditization and growing stay ahead in a highly competitive environment .Increasing commoditization and growing customer needs are forcing players to shift to solution -based models from product-based ones.In either model, the role of the distribution channel remains critical as it helps avert competition by maintaining relationship , providing advisory services and customizing need -based avert to overcome solutions. Relationship play an important role in the business of selling Mutual Fund products . An agent is an essential channel between Mutual Funds and investors /customers .However , it is difficult for AMCs to manage and monitor a large agent force. So, they take shelter in third-party distribution AMCs like Karvy , Bajaj Capital ,Integrated Enterprises ,etc. These AMCs, in turn appoint their agents to sell its products to the investor. Agents advise the prospective customers on the kind of product that caters to their needs. To unload their work , companies bear huge marketing expenses in the form of higher commission to lure investors.
Ans; An agent is an essential channel between investors and the Mutual Fund products.AMCs appoint agents to sell its products to the MF.Agents advice the customers on the kind of product that caters to their needs.