IFAs manage 15% of the industry AUM

The market share of IFAs in the mutual fund assets is 15%. Of the total Rs.23.39 lakh crore industry AUM as on December 2018, IFAs manage AUM of Rs.3.45 lakh crore, shows MFDEx data that constitute 96% of the industry.

The assets under advisory (AUA) of IFAs went up from Rs.2.50 lakh crore in January 2017, indicating a growth of close to 40% in AUA or Rs.95,000 crore in two years. Experts attribute this to the mark-to-market gains and increase in retail inflows.

Currently, the direct plan investors account for 43% or Rs.10 lakh crore of the industry AUM. With institutions and corporates favouring direct plans to invest in liquid and debt schemes, direct plans account for a substantial share. These are generally not sticky assets as corporates invest in these funds to park their surplus cash for a short period only.

The assets of national distributors including those such as NJ, Prudent and Fundsindia that operate under sub-broking model and large distributors such as Bajaj Capital are next in line after IFAs. The assets managed by national distributors stood at Rs. 2.80 lakh crore on December 2018.

Similarly, the assets managed by banks stood at Rs.3.68 lakh crore in June. The private banks managed a higher share—the AUA of private banks was Rs.2.88 lakh crore.

Regional distributors and others (robo advisors and overseas distributors) manage AUM of Rs.58000 crore and Rs.2.88 lakh crore, respectively.

In T30 locations, direct investments share in AUM is 46% followed by national distributors, IFAs and other banks by 11% each. Regional distributors and PSU banks hold 3% and 2% share respectively in T30 locations.

Similarly, in B30 cities, IFAs share in AUM is 30%  followed by direct investments share at 21%. PSU and Other banks hold 13% and 10% share in B30 locations AUM.