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  • MF News New IFA registration witnesses a steep 57% decline

    New IFA registration witnesses a steep 57% decline

    This could slow down the MF industry’s growth. In September, a report by AMFI-BCG had noted that adding 4 lakh new distributors in next five years will be crucial for the industry to achieve Rs.100 lakh crore AUM.
    Sridhar Kumar Sahu Dec 30, 2019

    The MF industry has witnessed a steep decline of 57% in addition of new IFAs this fiscal. Latest AMFI data shows that the industry has added only 5,709 new IFAs in April-November 2019, as against 13,273 in the corresponding period in 2018.

    Experts feel this could lead to a slowdown in the MF industry’s growth. In September, a report by AMFI-BCG noted that adding 4 lakh new distributors in next five years will be crucial to achieve Rs 100 lakh crore AUM.

    The change in MF industry’s commission structure is seen as a major factor for the decline in new IFA registration. In September 2018, SEBI banned upfront commission and asked AMCs to shift to an all-trail model to compensate mutual fund distributors. Moreover, the recent regulatory changes in TER structure may have had further impact on the industry’s attractiveness for new distributors.

    In a telling sign, the new ARN registrations of IFAs has declined steadily post October 2018.

    Month

    Addition of new individual ARNs in 2018

    Addition of new individual ARNs in 2019

    November

    1,047

    605

    October

    1,261

    615

    September

    1,906

    706

    August

    1,858

    687

    July

    1,791

    713

    June

    1,979

    724

    May

    1,832

    786

    April

    1,599

    873

    Total

    13,273

    5,709

     
    Considering all categories of mutual fund distributors (individual, new cadre, overseas distributors, corporate, corporate employees and IFA employees) new ARN registrations stood at 29,272 in April-November 2019, most of them being EUIN holders working for banks and NDs.
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    10 Comments
    Prashant · 4 years ago `
    We all know why this is happening but the lobby will only say that we need more distributors which exposes their use and throw policy. By reducing the brokerages and keeping their margin constant now they saw what can happen to their business when they remove the most important link. We are not napkins which you use and throw. We are human beings who have to run out livelihood. We will never work for your profits but only for investor wealth creation and conservation. Mind you.
    Prashant · 4 years ago `
    And cafemutual is just writing that decline in the brokerages may have lead to this. We don't get food and everything free. Also how can you write may. It is the truth. How can one dedicate a huge amount of time where one is not getting anything in return? If your salary is reduced to 1/3rd will you still keep working and will you motivate others to join your organisation or your field?
    Sanjay Mathur · 4 years ago `
    It is very difficult for a new comer to survive on present commission structure exclusively with mutual fund business.
    More over it is difficult to convince clients when there slump in economy.
    Stany Dsouza · 4 years ago `
    One more reason is threshold limit of GST is 20 lakh for MF distributors and for goods it is 40 lakh. I kindly request GST team please increase this limit to 40 lakh. In all industries customer has to pay GST, in mtutal funds IFA has to pay GST for his commission.
    Geetika Agarwal · 4 years ago
    You are 100% right
    Reply
    Surendra Kumar Agarwal · 4 years ago `
    Amc are more interested in promoting direct plan rather than through distributors. Then, how can they expect distributors to work for them. I do not understand why they have to tell investors how much they a?e paying to distributors. In no other business, customers are told how much a sales person is getting. What is the logic. Whole environment is unfriendly.
    Balasaheb Gore · 4 years ago
    Now everybody is interested in promoting direct plan and remove distributor.
    Reply
    Balasaheb Gore · 4 years ago `
    Now everybody is interested in promoting direct plan and remove distributor.
    Rahul · 4 years ago `
    Finally SEBI and AMCs are achieving their mission of Zeroing Distribution in Mutual Funds. Poori daal kaali hai. Digital India,Jobless India and Shame Shame to you regulators
    Geetika Agarwal · 4 years ago `
    ?? ?? AMFI ?? ???????? ??? ????????? ????? ???????? ????? ?? ??? ???? ????? ??? ?? ?? ?? ?????? ??? ?? ??? ?????? ?? 100 ??? ????? ?? ?????? ?? ???? ???? ?? ????, ??? ???? ?? ?????????? ?????????? ?????? ??? ?? ??? ????? ?? ??? ???
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