npavan78
14-07-2008, 07:25 AM
The mutual fund industry in the country should brace up for embracing outsourcing of activities such as accounting services to compete with global players, a report said.
With the entry of new players in the industry, the demand for accounting services is likely to increase. In such intense competition, the fee rates would drop and this should be the right time for the fund houses to seriously consider outsourcing, a joint study by CII and PWC said.
The report 'Indian Mutual Fund Industry: Sustaining Growth in a Maturing Market' further advocated to replace the present networth criterion of Rs two crore to Rs 10 crore for obtaining mutual fund license.
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This, it said, would ensure that only major and serious players, capable of sustaining over long term, are able to operate in the industry.
There is also a case for re-consideration of cap on the maximum amount of expenses that can be charged to a scheme, as the industry matures, the report added.
The demand and supply gap of talent in the mutual fund industry should also be bridged and industry players through AMFI should tie up with colleges to offer programmes related to financial services in general and the mutual fund, it emphasised.
Pointing the challenges in the mutual fund industry, it said the costs of operations in India has been mounting and real estate prices are at an all time high, denting the operating margins quite severely.
To top it, trained staff is not available and the present staff is difficult to retain, the report added.
With the entry of new players in the industry, the demand for accounting services is likely to increase. In such intense competition, the fee rates would drop and this should be the right time for the fund houses to seriously consider outsourcing, a joint study by CII and PWC said.
The report 'Indian Mutual Fund Industry: Sustaining Growth in a Maturing Market' further advocated to replace the present networth criterion of Rs two crore to Rs 10 crore for obtaining mutual fund license.
Also Read
à Misery is mutual: NAVs of most MF schemes fall to 52-week low
à India out of trillion-dollar stock market league
à Bear-hit brokers find solace in SMS joke therapy
à Leveraged promoters to face the margin call
à Where to invest during market crisis
This, it said, would ensure that only major and serious players, capable of sustaining over long term, are able to operate in the industry.
There is also a case for re-consideration of cap on the maximum amount of expenses that can be charged to a scheme, as the industry matures, the report added.
The demand and supply gap of talent in the mutual fund industry should also be bridged and industry players through AMFI should tie up with colleges to offer programmes related to financial services in general and the mutual fund, it emphasised.
Pointing the challenges in the mutual fund industry, it said the costs of operations in India has been mounting and real estate prices are at an all time high, denting the operating margins quite severely.
To top it, trained staff is not available and the present staff is difficult to retain, the report added.