Distributors continue to command a significant portion of the total MF industry’s assets. AMFI latest data shows that the proportion of direct versus regular in the MF industry was 45:55 i.e. 45% of industry’s assets has come from direct plan while 55% of assets were invested through regular plans.
The higher affinity towards regular plans is largely due to contribution from individual investors. AMFI data shows that 86% of retail investors AUM has been invested through regular plans while 78% of HNIs’ assets has come to the industry through regular plans.
Anup Bhaiya of Money Honey Financial Services believes that individual investors continue to prefer distributors over direct plans. “Many investors be it HNIs or retail prefer investing in mutual funds through regular plans as they recognize the value added by distributors. The trust factor also comes into play. In fact, the recent market turmoil has made the case for expert advice stronger.”
Seconding his views, Sadashiv Arvind Phene feels that investors need constant handholding by distributors to ride volatility. “Many investors need an expert who can understand themarket situation and protect them from irrational decision making,” he said.
In terms of scheme category, 81% of equity assets has come from regular plan while 47% of debt AUM was in regular plan as on March 2020.
Meanwhile direct plan was seen as the most preferred option for investment in ETFs and FOFs as nearly 80% assets in these fund categories came through direct plan. Similarly, liquid/money market funds were dominated by institutional investors with 72% of assets through direct plan.
