'Declining fees across all asset classes are a given'

Revision of expense slabs by the regulator, the push towards passives, and the anticipated entry of several new AMCs translate into a greater focus on cost. Do you believe there is potential to drive the costs (expense ratios) down substantially from the current levels while still running the business profitably?

We have to acknowledge that the asset-management business will always be a regulated one and a key regulatory objective is to significantly drive financial inclusion, literacy and availability of competitively priced financial products for all citizens. Competition driving fees lower is a global phenomenon. Add to this cauldron the emergence of fintech and other technology-driven players with perhaps a different set of financial metrics than conventional players, where number of investors is more important than absolute fee. These all will lead to a perfect storm - in a nice way. The biggest beneficiary will be the investor - a wider range of products, all available to select on their own personal mobile device at the lowest cost. So as an existing player, this scenario of declining fees across all asset classes are a given.

As a global asset manager, we are used to this fee and pricing pressure. But I believe that the pressing concern is not the expense ratio but delivering superlative performance and offering products that fulfill the investor's life goals. As long as you're successfully supporting your investor's ambitions, you will remain relevant and be the asset manager of choice for her.

How is the increasing proliferation of direct plans and the new age platforms changing the dynamics between the three key stakeholders - the investors, the distributors, and the manufacturers (AMCs)?

I am not so concerned about the increasing number of direct plan users as it may be reflective of increasing awareness and knowledge of mutual funds. We are, however, aware that may not necessarily always be the case. The one area of concern for all of us in the industry is the number of unique investors relative to our large population. Fintechs have done a phenomenal job connecting digital natives with financial instruments. They have made managing money 'cool' and have been encouraging the DIY mode of investing. But we have to be cognizant that financial literacy is still very low. Whilst mobile technology has made financial services available to all, I believe that the role of distributors remains critical and distributors will remain the 'setu' that connects the investors to the right investment solutions.

Rapid-fire questions:

• Investment guru/manager you admire the most: My late mother. Unknown to all, including my father, she managed to save very quietly and efficiently. It was a time when investment avenues were neither well-known nor available. If they were, I am sure she would have made a brilliant investment manager as well.
• Business leader you'd like to emulate: Anand Mahindra - for winning and competing in some of the most competitive sectors, and that too a wide range of them. Always a learning and joy to read his views and Twitter messages.
• The most rewarding financial investment you've ever made: One simple mantra - stay invested. The joys of compounding continue to amaze.
• Money mantra you swear by: If you don't understand it, don't invest in it.
• If not a money manager, you'd be: A banker