IFAs and NDs create over 60% of active SIP accounts

An analysis of CAMS data which covers 67% of the industry’s AUM shows that of the 1.84 crore live SIP accounts as on April 2019, IFAs and NDs have created 1.15 crore.

While the top 3000 IFAs have created over 63 lakh SIP folios, other IFAs added over 9 lakh active SIP accounts. NDs include players like NJ India, Prudent and Bajaj Capital have created over 42 lakh SIP accounts as on April 2019.

This indicates that of all the distributor categories, IFAs have created the highest SIP accounts. Of the total 1.84 crore SIP accounts, IFAs have activated 72.68 lakh SIP accounts that is a 39% share. NDs followed IFAs with 23% share followed by PSU banks at 13% share.

Industry experts attribute this to focus of IFAs on SIPs. They said that IFAs have been recommending SIP as an investment tool for their clients even before it became popular.

Live SIP accounts as on April 2019

Source: CAMS

Analyzing CAMS data on new SIP registrations in April 2019, we see that IFAs and NDs together have registered 47% of the total SIPs in April.

Further, majority of SIP registrations in April came through IFAs (IFAs include IFA and others category). Overall, IFAs registered 1.66 lakh new SIP accounts in April, bagging the top spot.

Direct plans followed IFAs with 1.54 lakh new SIPs (27% market share) overtaking NDs. D.P. Singh, ED & CMO (Domestic) SBI MF feels that the distributor business numbers are likely to increase going forward. As the new expense ratio structure came into effect in April 2019, there was a lot of uncertainty around trail commissions during the month. Consequently, many distributors did lower business during the month leading to higher market share of direct plans, he said.

Overall, 5.61 lakh new SIP accounts were registered in April 2019.

New SIP registrations in April 2019 (gross)

Source: CAMS