Recent AMFI data shows that 46% IFAs hail from B30 cities. As on November 2019, there are 86,949 registered individual distributors. Of this, 39,843 or 46% IFAs are from B30 cities, while the remaining 54% or 47,106 IFAs are from T30 cities.
Experts feel that given the number of households in B30, concentration of distribution business in these locations is far from sufficient. The AMFI-BCG report, released earlier this year, shows that nearly 90% of Indian households are located in B30 cities.
“The industry has to come up with new strategies to attract more distributors from these locations. Currently, distributors in B30 get higher commission than their counterparts in T30. However, post the upfront commission ban and rationalization of TER, IFAs in these locations are having a tough time,” said the CEO of a fund house.
To bring new IFAs to the industry, the AMFI-BCG report suggests that SEBI can look at concept of “tied distribution” for new IFAs. This means AMCs who bring in new IFAs can work exclusively with them for some time to support them in their initial days.
Experts feel the industry can also look at adding small entrepreneurs who are running client facing businesses and looking to increase their income stream. Reaching out to medical store operators, car or home loan distributors and other entrepreneurs can help the MF industry grow at a faster pace, they say.
