Acknowledging the role played by distributors in the MF industry, AMFI, in its recommendation letter sent to SEBI on the RIA consultation paper has said that over 90% of AAUM in equity funds, ELSS and balanced funds is channelized by distributors.
“90% of the AAUM of equity, ELSS and balanced schemes in respect of retail investors has been through distributors,” said AMFI.
In other words, of every Rs. 100 of equity AUM held by investors, Rs. 90 was brought in by distributors with Rs. 10 coming through direct investors.
Further, AMFI has said that the mutual fund distributors have played a major role in popularizing SIPs over the years which is evident by the continuous growth in SIP accounts. The total SIP accounts have now crossed 1.16 crore and inflows via SIP have crossed Rs. 40,000 crores annually, mainly due to the stellar efforts of the distributors in spreading the SIP habit among retail investors, added AMFI.
AMFI has said that distributors have been providing the much needed last mile connect to investors, particularly in smaller towns and this is not limited to just enabling investors to invest in appropriate schemes, but also in helping investors stay on course through bouts of market volatility and thus experience the benefit of investing in mutual funds.
Although FY 2015-16 was a challenging year for the Indian securities market, the mutual fund industry witnessed steady positive net inflows month after month even when the FIIs were pulling out in a big way. This was largely because of the handholding of the investors by the MF distributors and convincing them to stay invested and/or invest at lower NAVs when the market had fallen, added AMFI.
