With the positivity surrounding the market, more distributors are turning to mutual funds. Fund houses are witnessing a steady rise in distributor empanelment in the recent past.
While a few fund officials attribute this trend to returns generated by mutual funds, others feel that increasing distributor engagement and technology advancements have helped them attract more distributors to sell mutual funds.
There could be multiple reasons behind this trend – increasing number of sub brokers empanelling with fund houses directly, superior fund performance, technological and knowledge assistance by AMCs through training & loyalty programs.
Ajit Menon, EVP, Head of Sales and Co-head of Marketing, DSP BlackRock MF told Cafemutual that his fund house has witnessed a healthy growth in empanelment after introducing electronic empanelment process a month back. “Our average monthly empanelment has grown from 150 to over 400 after the launch of electronic empanelment process. I believe the industry needs a large distribution force to increase penetration of mutual funds. And technology will help reach out to new distributors.”
Akhil Chaturvedi, Senior Vice President & Head – Sales, Motilal Oswal MF is of the view that interest of distributors has revived. “We are seeing an increase in empanelment from past three months. On an average, we are receiving 150 empanelment applications per month.” He further said that his fund house is selective and focuses on a few parameters like equity AUM, stickiness of assets etc. before entering into business relationship with any distributor.
G Pradeep Kumar, CEO, Union KBC MF says “We have increased our engagement with IFAs through training programs. This has helped us increase our distribution force.”
Vikaas Sachdeva, CEO, Edelweiss Mutual Fund is also seeing renewing interest in distributor empanelment. He attributed this trend to superior fund performance.
DP Singh, Executive Director and Chief Marketing Officer, Domestic Business, SBI Mutual Fund said that it will take another two-three months for empanelments to rise. “Currently, we have 10,000 active distributors in the industry. We expect it to increase in a few months from now.”
Chennai based IFA Ramesh Bhat of Aniram pointed out that majority of sub brokers are now directly empanelling with the fund houses. “The sub broker model may not help IFAs create their own identity. Also, direct empanelment with fund houses ensure quality training, knowledge update and loyalty program which are beneficial for the IFAs.” Ramesh believes that IFAs should empanel with all the fund houses to provide client centric service.
Industry body AMFI too had undertaken a number of measures to attract more IFAs in MF fold. AMFI started issuing ARN free of cost to individuals and new cadre of distributors (for those who register for the first time) from February 2013 till March 2014 in a bid to expand the distribution force. According to AMFI, around 1200 people applied with AMFI for an ARN license till March 2013. Around 200 applications under the new cadre of distributor category were received till March 2013.
Currently, MF industry has over 1 lakh distributors of which nearly 69,000 are KYD complaint.
