MF News Top 979 MF distributors earned gross commission of Rs.8500 crore commission last year

Top 979 MF distributors earned gross commission of Rs.8500 crore commission last year

The number of top distributors has risen from 732 in FY 2016-17 to 979 in FY 2017-18.

nishant Jun 30, 2018

An analysis of commission paid to the top MF distributors shows that India’s top 979 mutual fund distributors, which includes banks, NDs and IFAs, earned revenue of Rs.8534 crore in FY 2017-18, a growth of 71% over FY2016-17 when the top distributors earned Rs.5000 crore.

Also, AMFI data shows that the number of distributors falling under the purview of SEBI criteria of ‘top distributors’ has increased to 979 in FY17-18 from 732 in FY16-17.

These distributors manages AUM of Rs.9.21 lakh crore that is 43% of the overall industry AUM. This also indicates that these distributors earned 93 basis points of the assets under advisory.

One of the key reasons for the increase in commission payout is due to the increase in total equity AUM. The total equity AUM including ELSS, balanced fund and equity ETFs of the industry has gone up from Rs. 6.73 lakh crore in April 2017 to Rs. 10.68 lakh crore in March 2018. In fact, equity funds including pure equity, ELSS, equity ETFs and balanced funds witnessed 117% growth in net inflows last fiscal i.e. from Rs.1.13 lakh crore in FY2016-17 to Rs.2.85 lakh crore in FY 2017-18, an addition of Rs.1.54 lakh crore.

Another reason could be mark to market gain. The BSE Sensex inched up by 3264 points, or 11%, to close at 33,174 points last fiscal.

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16 Comments

ram gaikwa · 5 years ago `

last distributor ( 979 ) AUM ?

PRASHANT · 5 years ago `

This is what is pinching the AMCs and that is why they are making SEBI reduce brokerages even on existing AUM which was supposed to be fixed or freezes at the brokerage rate committed at the time of initial 8nvestment. Also they are making SEBI force RIA on us and crores of investors which is malicious and malaise in intentions.

Shame shame shame

Sinha · 5 years ago `

Except for mf industry none other segment such micro detailing analsis is published on public forum. Insurance commission figures run in Crores never till date thrown light who made what. I wonder y Ifa fraternity is so weak small helpless child that doenst raise any voice on such matters. As such rampant awareness on per second basis is already on for promoting direct plans. It's a dead end for distribution buss atleast in mf.

Solomon · 5 years ago `

This article headline is mis-leading. The gross commission earned is including All Bank-Private and Public, Non-banks and National distributors. It’s does reflect the income of IFAs.

Why does LIC and other insurance companies not show what their gross commission are, since they mis-sell insurance products as investments.

M P hegde · 5 years ago `

ITS VERY SAD AND DISTURBING THAT ONLY MUTUAL FUND ADVISORS ARE CALLED AS DISTRIBUTORS AND THEIR INCOME IS REVEALED.. ITS GROSS INCOME AND THEY PAY GST TO THE GOVT ON IT.. GOVT IS ALSO EARNINGS ON THEIR INCOME.. BUT THE FUND HOUSES ARE KEEPING QUIET ALL THE TIME AND ARE SILENT SPECATATORS IN THIS MEDIA GAME TO MALIGN THE ALREADY MALIGNED FRATERNITY.. TO BE FAIR TO THEM, LET LIC ALSO BE TRANSPARENT AND SHOW THE COMMISSIONS PAID ON EACH AND EVERY POLICY TO THE AGENTS. AS WELL AS THE GROSS EARNED BY THEM IN A FINANCIAL YEAR..

R C Gupta · 5 years ago `

This is SEBI's way of forcing distributors to adopt fee based model, They are under wrong impression that MF is pull product.....it is push product...it need lot of efforts to convince investor.....SEBI is failed organisation / regulator....out of overall AUM 78% is coming from top 15 cities of India....that means 22% rest of India is contributing.....shame on SEBI.....did nothing for penetration of product....Digital media is not the answer to address the issue of penetration....This area need human intervention ....only addressing expense ratio which is non issue.....who is accountable for debarring majority of India from participating in Mutual Funds.....why dont SEBi conduct serious research and find out whether retail investors want to pay fees or not? why 10 class pass is allowed to appear for NISM exam? how can 10 class pass will able to charge fees? because market performed in last 4 years AUM is looking good.....Wait for steep correction and then see and things in market will dry up.....same customers will flock for FDs....and SEBI will be forced to review its policy

NAVEEN KUMAR AGARWAL · 5 years ago `

What's wrong with top distributors earning Rs. 8500 crores. Have they committed any fraud. Can AMFI put up a similar data as to how much all AMCs put together have earned last year? Lets ask AMFI to put up a similar data and then put it to media.

Vishal Rastogi · 5 years ago

Truely said Naveen g..... d data must come alongwith all who has directly or indirectly earned income there in.

kalpana Gupta · 5 years ago

That's true nothing wrong if top IFAs are getting good commission. ..its bcoz they did hard work to build Such aum. ..also one of RM told me that ifas in last three year got the commissions more than their customers has had received returns on investment. ..i don't Know how he and his AMC got these figures. ...Mean to say that this kind of attitude AMCs are carrying towards the IFAs.. .so sad

Jayesh · 5 years ago

I agree with the RM. The RM wanted to say was that AMCs in these 3yrs could not Generate enough returns for the investors. All he wanted to say was that their funds managers weren't efficient enough to generate that much returns.

Prafulla · 5 years ago `

Why AMCs/SEBI/RBI/Finance Minstry can't reduce the overheads (like Hefty Salaries to Employees, Flight tickets even if it is overnight journey, Cocktails parties and Hefty Commission (up to 15% in NFO time) to National Distributors in place of reducing the commission for the small distributors. On the contrary SEBI/AMFI is supporting to appoint more no. of Distributors with No Examination Fees.
Don't you feel that it is Just like Excise Dept. selling the Licences for Bar and wine shops and there is DARU BANDI dept. of the State govt.. Another example is when child attains the age of 16 yrs can ride a scooter of 50 CC (without gear) and 50 CC Scooter is not available in the market.
It means the govt. is making a mockery of it.

Ambuj · 5 years ago `

Seeing these details SEBI thinks distributors are earning lot of money but lakhs of small IFAs don't even recove their cost what SEBI is doing about them.

Desmond Mascarenhas · 5 years ago `

Let's LIC be made to declare commission paid to agents.

R C Gupta · 5 years ago

stop selling MF....Sell Life Insurance ....else MF distributors will be perished

RNKUMAR · 5 years ago `

Why collect data on lic and private insurance companies in India. Gic and also Private General Insurance xomp

Doddi Venkata Ramana · 5 years ago `

What an illusion these kind of articles creates. If one looks at the article and consequent trial of responses, many of us are talking about all except one thing. The above mentioned income is earned predominantly by Banks, NDs and other corporates not by IFAs. While whole regulation is on IFAs. The article also gives an impression that IFAs are equeally earning good. If a bank client walks into a bank, the average lumpsum investment into mutual funds from that client is generally around Rs. 10 lakhs plus. However if an IFA goes to a client place and convinces for MF investment, what is the average investment he gets. If an IFA has to reach an AUM of 500 crores, he has to spend a life time, however how much time a bank needs to get 500 crores AUM. How can one ignores all these while writing an article. These days, media and online portals write about MF advisory, cost of the MFs to the clients. But why can't one write the whole picture atleast give a glimpse of it. instead of giving a wrong picture.

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