Page 35 - Banking Finance February 2025

ARTICLE

Mutual funds can appear complex to first-time Rs.5,000 per month for 15 years can grow into Rs.25-30
investors. Simplify the jargon and use relatable lakhs (assuming an annual return of 12%).
examples to explain concepts like diversification,
compounding, and SIPs. 4. Leverage Technology
Use analogies to make concepts relatable: For Digital tools and platforms can enhance your pitch,
instance, describe diversification as "not putting all making it interactive and personalized.
your eggs in one basket," making the idea easy to Use portfolio simulators to demonstrate potential
understand. growth scenarios based on investment amounts

Illustrate the power of compounding by comparing and timeframes.
it to planting a tree that grows larger with time, Share real-time data on market trends and fund
benefiting from consistent care (investments). performances through apps or web platforms.
Offer customized recommendations using robo-
2. Highlight the Benefits of SIPs
advisors or AI-driven tools that assess the client's
SIPs are an excellent way to attract investors, especially
risk profile and financial goals.
those who are risk-averse or new to investing.
Technology not only adds credibility but also enhances the
Emphasize the following benefits:
customer experience, making complex concepts more
Affordability: Start investing with as little as
accessible.
Rs.500 a month.
Discipline: Instills regular investment habits.
5. Emphasize Tax Benefits
Rupee Cost Averaging: Reduces the impact of Highlight the tax-saving potential of mutual funds,
market volatility by buying more units when prices particularly Equity-Linked Savings Schemes (ELSS).
are low and fewer when prices are high. ELSS investments qualify for deductions under Section
Flexibility: Easy to start, pause, or modify according 80C of the Income Tax Act, up to Rs.1.5 lakh annually.
to financial goals. The shortest lock-in period among tax-saving
For example, say, "Imagine you're saving for a vacation. instruments (3 years) makes ELSS more appealing
Instead of waiting for a large sum, why not invest small than options like Public Provident Fund (PPF) or
amounts regularly and let your money grow to reach your National Savings Certificate (NSC).
goal?" Explain this with examples, such as:
"By investing Rs.1.5 lakh in ELSS, you not only save up to
3. Use Data and Visuals Rs.46,800 in taxes (for the 30% tax slab) but also gain
Back your pitch with data and visuals to reinforce market-linked returns over three years."
credibility and make the information more engaging.
Historical Returns: Showcase performance data of 6. Address Risk Concerns
mutual funds over various timeframes to highlight For risk-averse investors, acknowledging their concerns
consistency and potential returns. while presenting solutions is essential.
Comparative Analysis: Compare mutual funds with Diversification: Emphasize how mutual funds
traditional savings options like fixed deposits, spread investments across various assets to
emphasizing inflation-beating returns. mitigate risks.
Goal-Based Illustrations: Use charts to Debt Funds: Suggest low-risk products like debt or
demonstrate how SIPs can help achieve goals like liquid funds for stable returns.
retirement or education funding over specific Long-Term Perspective: Explain how staying
timelines. invested over the long term reduces the impact of
For example, present a graph showing how an SIP of market fluctuations.

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