11 fund houses sign up with Paytm Money as platform to go live this month

With Paytm’s mutual fund (MF) foray around the corner, 11 fund houses, accounting for 62 per cent of industry assets, have completed the paperwork and have been empanelled with Paytm Money. 

The asset management firms to have signed up with the MF distribution platform include large-sized fund houses like ICICI Prudential MF, HDFC MF, Reliance MF, UTI MF, as well as relatively smaller fund houses such as Invesco MF, Mirae AMC and Mahindra MF. 

Most of these firms have confirmed the development. 

Manish Mehta, head of sales, distribution and marketing at Kotak MF, said: “Paytm has tied-up with around a dozen mutual fund companies, including us. The Mutual Funds Sahi Hai campaign has significantly contributed towards awareness. However, execution could still be a challenge. With the rise of digitalisation in India, accessing MFs as an ideal investment option would be easier for potential investors. The industry will be able to leverage the large customer base and geographic reach that Paytm will offer to deepen the penetration of mutual funds.” 

Other fund houses are in various stages of reaching an agreement with Paytm Money, and should get empanelled soon. 

Unlike most MF distributors in India, Paytm Money will be offering low-cost direct plans that don’t charge for distribution expenses. Paytm Money is a registered investment adviser (RIA) with Sebi and will charge a nominal fee for buying funds. 

Paytm Money’s model will bypass distributors that play a key role in hand-holding clients, especially first-time investors. To address the absence of distributors, Patym Money has tied up with third-party MF research firms such as Value Research and Morningstar for their insights on schemes. 

Some distributors believe the company’s foray into MF may not disrupt the Rs 23-trillion MF industry. 

In an earlier interaction with Business Standard, Srikanth Meenakshi, co-founder and chief operating officer of FundsIndia, said: “Those just looking for transaction convenience and parking surplus funds on a temporary basis would get drawn to platforms like Paytm Money. However, serious investors with a long-term horizon will continue to prefer platforms like ours, where they can get timely and customised advice. We are going to stick to our business model despite what the competition is doing,” said the FundsIndia COO. 

Paytm Money has contested this line of argument. “We are committed towards building a platform for long-term investors and bringing MF investments to the masses. Paytm Money will focus on providing convenience of digital investing, ease of payments, real-time transaction processing, and updated investment portfolio with powerful insights,” said a spokesperson for Paytm Money.