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MF News Slowdown in new ARN registration post upfront commission ban

Slowdown in new ARN registration post upfront commission ban

The MF industry has added 3346 new distributors in October-December 2018 as against 5,555 in July-September 2018 and 5410 in April-June 2018.
Nishant Patnaik Jan 21, 2019

Ban on upfront commission seems to have subdued interest in becoming mutual fund distributors.

AMFI’s latest data on status of registration of new ARN shows that while the industry has added 3346 new distributors under individual category in the third quarter of FY 2018-19 i.e. October-December 18, 5555 (July-September 2018) and 5410 (April-June) individuals joined mutual fund distribution business in the first two quarters of FY 2018-19. A rough calculation indicates that the industry has witnessed a decline of 40% in terms of number of new distributors.

Though it is too early to say that this decline is due to upfront commission ban, going by the first indications, the short-term impact of the move is not in favour of the industry.

The mutual fund industry has added 14,311 new IFAs in the first nine months of this financial year. Overall, the industry has added 43754 new distributors including 28,500 employees of corporates and IFAs in April-December 2018.

In FY 2017-18, while the industry added 20339 new distributors under individual category, 57,831 joined MF distribution business including IFAs, corporates and employees.

Further, AMFI data shows that nearly 3100 individual distributors chose not to renew their ARN in the first nine months of FY 2018-19. This is much higher than what individuals did last fiscal. AMFI data shows that 2475 distributors did not renew their ARN in the entire FY 2017-18.

Meanwhile, 25660 ARNs got renewed in April-December 2018. Of these, over 15098 ARN renewals were from the individual category. In FY 2017-18, 26,712 ARNs were renewed.

As on December 2018, the mutual fund industry has over 2 lakh ARNs of which over 81800 lakh are individual distributors and 1.03 lakh are employees.

All these distributors are KYD compliant ARN holders.

Status on new ARN registration

Quarter

No. of individual distributors

April-June

5410

July-September

5555

October-December

3346

Total

14311

 

Source: AMFI

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30 Comments
Mangesh · 3 weeks ago
This is what is required by AMFI,or market regulators to curb individual distributors and encourage only big players. This is harmful from long term point of view. You will see more damage to new ARN registration if NIFTY falls close to 10000..
Mahesh · 3 weeks ago
Very True.AMFI should re-think abouts its upfront & Low commission structure for Distributors.
AMIT GOSALIA · 3 weeks ago
it will further reduce
Reply
Wealth Zone Group · 3 weeks ago
Very true. SEBI should reconsider their order and introspect what they have done for the destruction of the market..
Ramkumar · 3 weeks ago
Not only new registration declines, the industry may experience renewal declines also... many of mini distributors will quit the biz...
Sagar bhalekar · 3 weeks ago
It will further reduces
Sagar bhalekar · 3 weeks ago
It will further reduces
Kinnary shah · 3 weeks ago
Write to prime minister for this...you will get link from google...so prime minister should also know what sebi and amfi is doing for individual enterpreneurs...
SRIMANT MISHRA · 3 weeks ago
No need of individual ARNs for the industry.They acquired the details of the investors from the Ifas and now they make call to them for direct investment.They just want to eliminate the individual distributors. And all these steps are taken by SEBI for the benefits of AMCs.
PRADEEP DUBEY · 3 weeks ago
Very true. SEBI and wants to destroy the IFA. They had taken money from big players
Murari · 3 weeks ago
Distributors are leaving and no fresh additions. This is what SEBI wanted. It is good. In fact SEBI should take up with Govt and make it punishable for distributing MFs. It is against humanity. In fact MFs should be banned in India. This is the only solution. Some of the distributors are still continuing despite a major reduction in commissions and removing upfront. They appear to be not having any self respect
Maria Marsala · 3 weeks ago

Commissions are declining in USA and around the world. Advisors need to add other services of value to their clients on which they can earn additional monies for helping and servicing their clients .
Vikas Gupta · 3 weeks ago
Dear Madam,
What about commissions on Life Insurance & General Insurance in the world? Do they match with India?
ashok Singhal · 3 weeks ago
Dear ma'am
In USA and other countries person pay for each and every consultation it"s India where investor wants to snatch the commission too.
Reply
Vishhal Malhotra · 3 weeks ago
Will take it as a Positive Sign. As Limited Distributors and Less Competition Means a Vast Market & a Big Scope for Business. Focus and Sell Debt Funds. Start Charging Fee or Take Transaction Charge. Option to Sell Other Goal Based Solutions Too. Trust there is still a Huge Hope. Happy Selling.

Writer is a small time retail MF only Distributor from Lucknow with less than 10crs of AUM who took MF business seriously in Oct 2013
PRAVIN sINGH · 3 weeks ago
This is what is required by AMFI,or market regulators to curb individual distributors and encourage only big players. like SEBI and Government focus on only Big player, Retail and small have no place now. Good keep it up
Reply
Vaibhav Dhoka · 3 weeks ago
When it comes to commission both SEBI & AMFI action are not individual supportive.AMC's now want KYC for older unit holders,and are withholding commission.There are clients who have moved to other places,how can IFA get KYC. Therefore it is armtwisting tactics adopted by AMFI.It is incorrect to hold back commission.
sajy m varghese · 3 weeks ago
Stop the upfront is not fair. Already upfront & trail are nominal. AMFI should re-think about its upfront & Low commission structure for Distributors. Day to day living cost is very high. so plzzzzzzzzzzzzzzzz....
vinod kumar harjai · 3 weeks ago
Sebi wants there should be advisors but do free services , or the investors should go Direct.
stopping upfront is not bad,but advisors who have done great job of bringing investors in MF Industry
shoul not be deprived of their due
RAJENDRA KUMAR VERMA · 3 weeks ago
AMFI , SEBI ....HI...HI...
SUDIP KUMAR MODAK · 3 weeks ago
What accutually SEBI wants? Do they want to collapse Mutual fund business ? Insurance agents are getting 40?comission and incase of Mutual fund agent 0.40%. How can we survive.? We have buy our Bread from the same market. And is it easy to sale Mutual fund product.?
Ajay t · 3 weeks ago
Unless the Ifa channel is expired n to the ground level upfront has to be banned. Mf is only product where this guy's male repeat commission for one time sales. Results are happening to show
MAHESHA K · 3 weeks ago
Still now in major rural small investors due to MF schemes lack of knowledge not investing mutual funds investments , Upfront commission bans I think IFA s difficult to service small investors in rural as well as in urban also.
ashok singhal · 3 weeks ago
persons holding big posts in SEBI and AMFI are sitting in air conditioned rooms and getting thick pay packets,can they think to roam door to door for getting their livelihood or pay packet reduced to thinner levels they are looking at the very small number of big IFAs who are getting more but not at the big numbers of small earning distributors. Shame on such thick skin shameless fellows for making one sided decision of banning upfront commission.They want to kill a huge number of small distributors who are putting hard labour to pull their families.
Ajay Kumar verma · 2 weeks ago
AMFI and SEBI & Finance Depart. are distroying the agent/Advisor communities and forced to leave the business . Salaries of officials of above deptt. are increasing every year and our income are decreasing many times in each year. Their expenses are rising every year. Our communities family expenses are decreasing every year in their eyes.
Reply
D B DESAI · 3 weeks ago
A notion about motive, knowledge, service provided by some channels other than IFA is required to be checked. They are against IFAs because of this wrong notion. But it is far from reality.
Manas Paul · 3 weeks ago
How many IFA's children are out of school for not paying school fees ?

How many IFA's guardian are in critical condition for not paying medical bills & are terminally serious ?

How many IFA's are in no position to pay for their spouses critical pregnancy conditions ?

Working in this platform is so intriguing, scrambling that you feel your life is just waste of time.
Raju S · 3 weeks ago
Govt will appoint robots to against sebi and amfi employees...
tdevendra · 3 weeks ago
all the ifa:s have to blame themselves as the forum is deprived of collective wisdom. further it AMCS/AMFI which are to be blamed for all the incogruities being projected to SEBI. while it is welcome that upfront may have been abolished, the same is not projected by AMCS/AMFI to understand the difficulties of IFAS. the trail can be substituted to a maximum of 1.0% for all categories irrespective of schemes. also the we have Illiterate AMC/amfi(so called literates) earns in crores, they dont understand the plight of budding IFA;S who ekes out their profession. it todays world a man needs nearly 30000 per month to sustain a family of 3 with bare minimum facilities . the facts are to be dawned unless some body does 10 crores of aum then only after taxation they get hardly 20000 which is less than a labourer in a bank/state govt/central govt. is this way sebi/amc/amfi defines mutual fund way of treating ifas let them have human conscience to understand and determine a better way of deployment of human resources
tdevendra · 3 weeks ago
all the ifa:s have to blame themselves as the forum is deprived of collective wisdom. further it AMCS/AMFI which are to be blamed for all the incogruities being projected to SEBI. while it is welcome that upfront may have been abolished, the same is not projected by AMCS/AMFI to understand the difficulties of IFAS. the trail can be substituted to a maximum of 1.0% for all categories irrespective of schemes. also the we have Illiterate AMC/amfi(so called literates) earns in crores, they dont understand the plight of budding IFA;S who ekes out their profession. it todays world a man needs nearly 30000 per month to sustain a family of 3 with bare minimum facilities . the facts are to be dawned unless some body does 10 crores of aum then only after taxation they get hardly 20000 which is less than a labourer in a bank/state govt/central govt. is this way sebi/amc/amfi defines mutual fund way of treating ifas let them have human conscience to understand and determine a better way of deployment of human resources
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