Hi Investors/Partners,

Today, we're discussing a compelling retirement income strategy: the Systematic Withdrawal Plan (SWP).

If you're planning for a steady monthly income during retirement, an SWP can help you generate sustainable cash flow from your investments. While traditional options like fixed deposits (FDs) have limitations, SWPs from mutual funds offer a flexible and balanced approach, considering returns, risk, regular income, liquidity, and potential appreciation.

The Retirement Income Challenge:

Many investors haven't considered how they'll generate monthly income from their retirement savings. While FDs might seem like the obvious choice, their returns (6-7% pre-tax) are often low and carry reinvestment risk. Rates could decline significantly over a 10-15 year retirement.

Why SWPs? Addressing Investor Concerns:

When discussing SWPs, I often ask investors:

1. "Do you like the returns from traditional products?". Most say NO.

2. "Then why invest in FDs?". The common answer is safety. Although FDs are a common choice for safety, deposits are only insured up to ₹5 lakh per depositor per bank. Bank failures, like the recent closure of Charminar Bank in Hyderabad, do happen.

Many retirees gravitate towards traditional products due to perceived safety and a lack of awareness about alternate options. While traditional products offer safety, regular income, and liquidity, SWPs from hybrid funds can offer all of those with a certain degree of risk plus the potential for capital appreciation over the long term.

How SWPs Work?

Hybrid mutual funds, suitable for long-term investing, provide diversification across asset classes (debt, gold, equity). Balanced advantage funds, aggressive hybrid funds, and multi-asset allocation funds are ideal categories for SWPs, providing a mix of equity and debt with tax efficiency. Investors can choose the optimal allocation based on their investment needs and risk profile.

An SWP allows you to withdraw a fixed amount at regular intervals (monthly, quarterly), creating a predictable income stream for living expenses. This promotes financial discipline, preventing overspending and premature depletion of savings.

Some Examples of SWP with Corpus left (Capital Appreciation in Long term )

Assuming Investment in Equity Hybrid Funds and an average return of 11.12% p.a as per AMFI Best Practice Guidelines Circular No. 109-A /2024-25, Dated September 10, 2024. "Past performance may or may not be sustained in future and is not a guarantee of any future returns"

SWP and Inflation:

Retirement can last 25-30 years, so income needs to keep pace with inflation. SWPs can accommodate this by allowing for annual increases in withdrawal amounts.

SWP Benefits:

• Regular Income: Provides a predictable cash flow.

• Financial Discipline: Encourages responsible spending.

• Tax Efficiency: Can be more tax-efficient than interest/dividends for some investors.

• Potential Appreciation: Hybrid funds offer the possibility of growth.

• Peace of Mind: Reduces financial stress during retirement.

A Growing Trend:

While SWPs are still relatively new, they are poised to become as popular as SIPs in mutual funds.

Opportunity for Partners/Mutual Fund Distributors:

This is a significant opportunity to educate investors about SWPs as an alternative to FDs. The bank deposit market is enormous, representing a large untapped potential for mutual fund investments. BANK DEPOSIT SIZE in India is 212 lac Cr (Approximately 4 times of MF industry AUM), Source: SBI & RBI research Issue # 13, FY25 19-August-2024

Addressing Distributor Concerns:

Some distributors worry that SWPs will reduce their AUM. However, SWPs are initiated after corpus accumulation. Focus on building a ₹1 crore monthly SWP book size. This can translate to ₹200 crore initial AUM and potentially ₹400 crore after 10 years (including potential appreciation), even with ongoing withdrawals. Integrate SWP explanations into SIP discussions to maximize client engagement.

Thanks

Bharat kachhadia

Zonal Manager AP, TN & Tamilnadu

Mr. Yusuf Saunasath, Head - Stock Broking Operations, NJ Group

We had started Capital Market transaction platform in 2012. For 5 years we were using Exchange front end software (NOW) for transaction. The main limitation of NOW system was that it had separate login ID & Password, hence client had to remember 2 login details, for E-Wealth Mutual Fund separate & for capital Market

In 2017 we migrated from NOW to another software. Single Sign ON facility was introduced in the same in both Web & Mobile APP. In Mobile App Client had flexibility to login from NJ E-Wealth App & go to trading app. Or client can directly login in CM application.

Since past few years, we have been observing stability issue in the CM software, we were receiving many feedbacks on client not able to login to trading platform, the UI/UX of the platform is out dated, app getting crash, other feedbacks like getting portfolio details on real time basis ie investment amount & currently value, user friendly UI/UX.

We have been reviewing all these feedbacks from last 1 year & exploring all competitors platform to gather the list of features which are most commonly offered & missing in NJ CM platform.

After a thorough analysis we started hunt for the software vendor in which all the important features are covered. In addition to the features our Target was to offer a platform with best in class UI/UX & stable product addressing all the concerns in the existing platform.

In April 2021, the vendor was finalized & we started work on the platform, many customizations were done in the existing software of the vendor to address all the requirement of the clients. The software development was completed in Oct 2021 & BETA launch was done in November 2021.

The new System is introduced to clients in Dec 2021. We can proudly say that the new system is Way Easier, Way Simpler & Way Better & is at par with what is offered by the leading brokers. We have tried to keep it simple & user friendly. Below are key offerings of the new system:

• Attractive UI/UX
• Real time Stock-wise valuation available on the Dash board
• Ease in transaction from multiple option
• Real time margin/holding display in trade window
• Customizable theme options (Dark & Light)
• Exchange-wise Last Trade Price display in Trade window for client ease in selection of exchange according to best price
• Ease in login in CM Mobile application with introduction of personalized login & option to enable Biometric for future login.
• Device registration feature to allow quick login
• Introduction of GTT (Good Till Traded) facility. GTT allows client to place order with validity of 365 days. Order remains active for 365 days & is triggered when the LTP is hit as per client entered value
• Option to switch from BUY to SELL & vice-versa in Trade window
• Screeners for in dept analysis for particular scrip

Since introduction of new platform we have been receiving many positive reviews.

We reiterate that our business & Risk Management policy doesn't change with new system.

The journey continues & we are continuously reviewing our partners & clients feedback & are committed to enhance the platform on an ongoing basis. We strive to offer the best in class features & facility to our clients in Capital Market transaction

Mr. Abhishek Dubey, Head - Strategic Business Development Unit

"Data is the new oil." Nearly two decades after Clive Humby coined this phrase, it remains relevant, emphasizing the transformative power of data in reshaping businesses. In the financial services industry, effective data utilization differentiates how businesses grow and scale rapidly. Ever wonder why you receive that email or SMS? Why are you offered a personal or top-up loan of X amount? Why is your credit card upgraded? Surprise surprise! They are likely to have your data and are trying to get to business. The critical question is: what actions are you taking for your business?

At NJ Wealth, a key question we grapple with is: how can data empower our Partners? Our efforts are to provide you with data, insights and tools to tackle continuing challenges and unlock new opportunities. Over time, we have introduced several new tools, reports, and data points for our Partners. The latest being the XIRR insights on dashboard and the new data points added in the Business Insight Report (refer to email dated: 13-01-2025).

In this article, I wish to just nudge you to get interested in what possibilities 'data' offers you. Being curious and getting excited about possibilities is a good start to get you wondering about what challenges you have and what you can do with data to solve the same. Well, I hope at the end of the article, you will have some pointers to get started. I would love to talk about some of these in detail in my future articles. As for now, let's get started... To cover enough ground and keep things simple, I have covered my thoughts in pointers which I believe you can easily understand and elaborate.

Key Challenges in the MF Distribution Business

Lets keep it simple here and only limit challenges at a 'micro' level. Here are the key challenges that all of us face...

• Customer Acquisition

• Customer Activation

• Cross-selling and Up-selling

• Customer Retention

Now that we have these challenges, let's try to create a framework that links ideas to the challenges and then data points to the actionable points. Note that I have limited my ideas to data points that are readily available in Partner Desk to you, especially in the Business Insight Report. Even beyond all this, you can have a lot of other ideas that would work as well.

a) Customer Acquisition:

b) Customer Activation:

c) Customer Cross-selling and Up-selling:

d) Customer Retention:

The above is not a comprehensive list and I am sure that you can have many more ideas on how to use data and our tools and activities to your advantage.

In brief...

Data is crucial for unlocking growth, retention, and cross-selling opportunities in our distribution business. A wealth of information and tools is readily available to you. In this article, we explored how the key challenges at the micro level for new and growing partners can be addressed using specific data points and tools at your disposal. There is no need to tackle everything at once; focusing on one activity per month can set the foundation for achieving more ambitious goals over time. I am confident that partners who work methodically with data will see significant improvements in their business outcomes.

As George Bernard Shaw wisely stated, "Imagination is the beginning of creation. You imagine what you desire, you will what you imagine, and at last you create what you will."

Wishing you all the best on your journey!

Mr. Abhishek Dubey, Head - Strategic Business Development Unit

Greetings from NJ!

It is my pleasure to have this interaction with you and share some insights on the newly launched NJ E-Wealth Account (EWA). As you may be aware, the new NJ EWA - desk version was launched on the eve of Independence Day, 15th August and the mobile app was released on 8th September. The launch was hugely successful and we are thankful for the positive feedback. We also appreciate the inputs for further improvement to make things even better. I take this opportunity to also thank our Partners and our Investors for their continued support and trust in us over all these years.

Coming back, the journey to this point has been exciting, to say the least...

Genesis:

Before we talk about the new NJ EWA, let me take a moment to rewind the clock a bit. As many old investors and Partners would remember, we were probably the first ones in the industry to have a dedicated client desk with daily updated mutual fund valuation reports, over two decades back. In 2010, we again were at the forefront in offering online digital mutual fund transactions facilities with the launch of the NJ EWA. Due to its different nature and compliance considerations, this came into being independent of the client desk for our customers. Even today, customers continue to have access to both NJ Client Desk and NJ E-Wealth Account.

The client desk ultimately evolved to its existing form, giving a consolidated wealth portfolio at a family level with multiple reports on a wide range of products. The client desk creation and investor mapping rights are with the Partners. The EWA on the other hand was positioned as a transaction desk for mutual funds, capital markets, LAS and other products available on the platform.

Over the years, we received many feedbacks from our clients & Partners to make things easy by consolidating both desks. This was a mammoth task and meant merging two legacy systems into one and offering a unified platform to effectively replace both. We were fortunate to get the go-ahead quickly from the management and after nearly nine months, we today have the new NJ E-Wealth Account launched. We took this opportunity to also revamp other things. In addition to the NJ EWA online desk and EWA mobile app, the www.njwealth.in website and the onboarding flow for new EWA customers were also revamped.

The new NJ EWA:

The driving idea was to offer investors a simplified and easy user experience, in addition to the objective of consolidation. Here are a few highlights of what we have tried to achieve.

Login:

We have updated the login experience to allow even custom login IDs and quick access PIN options in addition to the EWA ID & password. The desk access is strengthened with Two-Factor Authentication (2FA) with OTP for login. For the mobile app, the user experience is even easier with saved login credentials and login with just a PIN /password. The custom login options can be updated from the Settings page.

Single Desk:

The new EWA is a hybrid of both NJ EWA & Client Desk. In addition to the transaction facilities in different available products, we now also get consolidated wealth portfolios into different products and asset classes. The new EWA now has multiple dashboards and important reports for your investments. The work of consolidating all remaining reports of EWA and the client desk shall continue.

Mapping for Family Members:

The earlier version of the EWA had access and coverage of the portfolio at the single UCC level. In the new EWA, multiple UCCs at the investor level (as sole /first holder) is consolidated solely for the purpose of viewing the investment portfolio. Further, we have now introduced the facility to add other family members as ‘Child Accounts’ to view the entire family wealth portfolio in one place. For making transactions, one has to log in to the respective EWA /UCC for compliance/security reasons. As such, all individual EWAs /UCCs and child accounts will continue to have independent access to their portfolio.

Navigation & Reports:

The new EWA sports simplified, intuitive navigation and reports. We are now showing a dashboard with a consolidated overview of the portfolio. All reports are loaded by default in pre-selected formats, making them easy to use. The reports are organised product and nature wise. Presently, key reports are available in Mutual Funds, MARS, Stocks, DP Statements & Public Offer Reports. The reports further have different formats and view options. Over time, all important reports of the client desk will be available here.

For a ready and quick overview, we have created the Portfolio page where we are showing portfolio overview or current holdings, past performance and live systematic plans. Current holdings and live systematic plans are pretty much self-explanatory. The Portfolio ‘Past Performance’ page is something very interesting where I wish to draw your attention to. Here we are showing you the actual returns (called ‘XIRR’) you have enjoyed on your investments ‘since inception’ considering all cash-flows, including all inflows and outflows like redemptions, etc. This is the true performance of your investments and is something not usually known or accessible to investors. The performance of only live holdings does not give a true reflection of performance, and we would encourage one to start looking at performance at a broader level on asset classes and products over time.

Transaction Experience:

The transaction experience too has been made simpler and more intuitive. In mutual funds, we are offering the option to view all funds, existing portfolios and live systematic plans, making it easier to access and execute transactions. On the transaction page itself, you may change the transaction type easily and all relevant info is shown appropriately.

Future Developments:

The work is not over yet and perhaps should never be. We are continuing our work to add a few missing pieces and even more reports /features to the EWA. We are also keeping a close eye on the feedback and suggestions and making the required changes. The objective continues to not only have strong utility /functionality, but also have an elevated and easy user experience.

Conclusion:

The journey of EWA is not complete, indeed we have only begun. Personally, I feel the journey is more important and there are no destinations, only milestones to achieve and move forward. On behalf of the entire project, IT and operations teams, I would only reiterate our commitment to further improve and work towards achieving customer delight and satisfaction. We once again thank you all for your love, support and the opportunity to serve you.

I would also urge you all to please explore, familiarise and spend some time to understand the new EWA and its features /reports. Please also feel free to reach out to us and give your valuable suggestions.

Thank you.

Happy investing!