Non-associate distributors manage over half of the industry AUM. Non-associate distributors include IFAs, non-sponsored banks, NDs and online distribution platforms. Large banks having mutual fund business do not fall under non-associate distributors.
Out of the total Rs.23.25 lakh crore AUM as on April 2018, these distributors manage 51.4% or Rs.11.93 lakh crore AUM, shows ICRA data. The assets channelised through non-associate distributors increased from Rs.9.83 lakh crore in April 2017, i.e. a growth of Rs.2.1 lakh crore in the last one year.
The market share of the non-associate distributors increased marginally from 51.03% in April 2017 to 51.4% in April 2018.
Debashish Mohanty, Country Head, Retail Business, UTI Mutual Fund believes many investors want to invest with non-associate distributors. “Investors are more comfortable investing with non-associate distributors like mutual fund distributors. Many investors believe such distributors will not promote any specific product and will act in their best interest,” said Debashish.
Jimmy Patel, CEO, Quantum Mutual Fund attributes this investor preference to the broad-based approach of non-associate distributors. “Non-associate distributors typically recommend schemes from many fund houses. Their approach is not concentrated to one or two fund houses like associate distributors,” said Jimmy.
