PricewaterhouseCoopers (PwC) in consultation with two board members has reportedly submitted a white paper to AMFI suggesting measures to rope in more distributors to the mutual fund industry.
Last year, AMFI had constituted a working group comprising two board members, Vishal Kapoor, CEO, IDFC MF and Prathit Bhobe, MD and CEO, Tata MF to suggest ways to increase the number of IFAs and make MF distribution an attractive and appealing career option for individuals. PwC was entrusted with the task of submitting a white paper in this regard.
An AMFI board member requesting anonymity told Cafemutual that the working group has already submitted a white paper to AMFI in this regard. He said, “The white paper comprises a 10 year roadmap for the MF industry to rope in more distributors. Among a few suggestions are introduction of a dedicated course for college aspirants to take up advisory business and business development training programs for existing distributors to reduce attrition.” He further said that AMFI is likely to release this white paper soon.
The latest data by AMFI shows that the industry has seen a significant decline in the addition of new IFAs as only 5,709 new IFAs have joined in April-November 2019, as against 13,273 in the corresponding period in 2018. This leads to a steep 57% fall in addition of new IFAs.
In a vision document release last year, AMFI said that the number of individual MF distributors currently registered with AMFI is just over 83,000 and this number would be far less if the number of inactive distributors is factored in. Thus, the per-capita number of individual MF distributors (or IFAs as they are commonly referred to) vis-à-vis India’s population of 1.34 billion is woefully small, especially when compared to the insurance sector, which has reportedly more than 2.2 million insurance agents. A rough calculation shows that India has one IFA for every 16,200 people.
