Recent AMFI data shows that new ARN registrations of IFAs have declined for three consecutive quarters in a row. From a high of 5,555 ARN registrations in July-September 2018, new ARN registrations tapered to 3,346 (October-December 2018), 3,314 (January – March 2019) and 2,383 (April-June 2019). A rough calculation shows that compared to July-September 2018 quarter, new registrations declined by 57%.
The last few years have been a roller coaster ride for the advisory community. First came the euphoric phase when markets ran up, investor interest in mutual funds increased consequently leading to business growth. However, challenges arose in the last one and half year. On one hand, the regulator banned upfront commission and reduced trail commissions. On the other hand, equity and debt markets turned volatile making investors a bit cautious. While it is still early to comment, it appears that the current challenging environment has dampened enthusiasm in becoming mutual fund distributors.
Considering all categories of mutual fund distributors (individual, new cadre, overseas distributors, corporate, corporate employees and IFA employees) new ARN registrations declined from 16,536 (July-September 2018) to 12,506 (April-June 2019) a fall of 24%.
Along with lower new ARN registrations, the number of ARNs not renewed has also increased. While we could not find data for last quarter, non-renewal of ARNs was at a high of 19,902 in FY18-19.
Overall, the industry has 2.14 lakh ARN holders of which 1.01 lakh are individual ARN holders while 1.13 lakh are employees as on June 2019.
