DSP MF's Kalpen Parekh says mutual funds need to 'simplify, de-jargonise' offerings

"The need is to de-innovate and not innovate more," DSP MF's Kalpen Parekh said, adding that funds need to ‘simplify, de-jargonise and minimalise’, which expands the customer base.

Mutual funds products need simplification now, instead of more innovation, in order to cater to the growing pool of investors, DSP MF’s Kalpen Parekh said, while speaking at the Association of Registered Investment Advisors' Aspire event in Mumbai on March 21.

"The need is to de-innovate and not innovate more," Kalpen Parekh said, adding that funds need to ‘simplify, de-jargonise and minimalise’, which helps expand the customer base.

Parekh, Managing Director and CEO of DSP MF, said that  the industry needs to simplify offerings and avoid overwhelming investors with an excessive number of options. The basic MF offerings are already creating superior outcomes for over 3-4 decades now, he said. On top of it, there are many offerings like deposits, bonds, gold and silver etc, which all can be invested in via mutual funds.

"I think the industry has done massive innovation already in product design.  I think the need is to narrow down to a few products," Parekh said. The challenge is that the mutual fund industry has already created many categories for diverse investors.

Earlier in the discussion, Kotak AMC's Nilesh Shah has also spoken about overcoming barriers to reach out to a diverse investor base. While language is important, Shah had noted that in order to reach out to the diverse investors, making money for them is what ultimately counts, irrespective of the language you speak in. However, he added that beyond language, intent and authenticity play a crucial role. "More than language, people understand the heart. If I speak from my heart, people will understand. If I speak in jargon, people fall asleep," Shah added.

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