The mutual fund industry added 10,000 new distributors in FY 2016-17 as against 8,800 new ARNs in FY 2015-16, a growth of 14%, shows a report titled, ‘Quantum leap beckons,’ jointly released by AMFI and CRISIL.
The report states that the number of distributors went up from 75,554 in FY 2015-16 to 85,918 in FY 2016-17.
If we include EUIN holders (employees of distribution firms), the total number of distributors goes up to 1.91 lakh, as on May 2017, the report says. Of these 1.91 lakh ‘feet on street’, close to 82,000 are individual distributors and 1.08 lakh are employees of distribution firms.
Chennai-based IFA J. Jayakumar feels that the rise in the number of distributors is due to the market rally. According to him, many new distributors join the mutual fund industry whenever market reaches a new high. He said that the litmus test for the mutual fund industry is to sustain this growth number especially through a bear market.
He believes that just like IAPs, AMCs should also conduct a programme to encourage people to consider mutual fund distribution as a career option.
Dhruv Mehta, Chairman FIFA, feels that the media should highlight the success stories of distributors. “1% out of the total distributors may resort to fraudulent practices. Whereas media does not cover the 99% of the distributors who are doing a good job. The success stories of distributors should be highlighted so that more investors get the confidence to invest with the help of a distributor,” he says. He was speaking at the first AMFI Mutual Fund Summit held on Thursday in Mumbai.
Though the number of distributors doubled in the past six years, it is nowhere close to 20 lakh insurance agents, the report points out.
It goes on to add that three out of 10 distributors belong to Maharashtra, Madhya Pradesh and Chhattisgarh. While Rajasthan and Gujarat come second with 16% of the distribution base, Bihar and Jharkhand constituted the lowest distributor base with 5%.
In order to attract more distributors, AMFI launched an entirely paperless Aadhaar based online process for new registration and renewal for MF distributors.
