While the industry has witnessed a steep decline in the new ARN registrations post ban in upfront commission, the renewal of ARN is still seeing a growth albeit marginal.
AMFI data shows that close to 11026 IFAs have renewed their ARNs in April-September 2019 as compared to 10,965 IFAs in the corresponding period last year, a marginal growth of 1%.
Radhika Gupta, CEO Edelweiss MF believes that most distributors have kept their faith and confidence in the MF industry. She also said that clarity between distribution and advisory has played a key role in the growth of ARN renewals.
A CEO requesting anonymity said that this could be due to withheld commission issue. Earlier, SEBI had asked fund houses to pay withheld commission including upfront commission earned before October 22, 2018 only if distributors complete all the formalities. AMCs withhold commission including upfront commission for a number of reasons such as incomplete KYD, pending KYC, and so on.
Another CEO pointed out that while this is a positive trend, the industry has to see the number of new registrations and renewals in FY 2015-16.
Cafemutual did not have six-month data of this period, i.e. FY 2015-16. However, in the entire FY 2015-16, while the mutual fund industry had added 5,999 new individuals distributors, over 11300 ARNs were renewed in the individual category in FY 2015-16.
Individual ARNs renewed in the first half year
|
Months/Year |
2018 |
2019 |
Change |
|
April |
1599 |
1548 |
-51 |
|
May |
1832 |
1936 |
104 |
|
June |
1979 |
1881 |
-98 |
|
July |
1791 |
2172 |
381 |
|
August |
1858 |
1839 |
-19 |
|
September |
1906 |
1650 |
-256 |
|
Total |
10965 |
11026 |
61 |
Source: AMFI
