Recent AMFI data shows that 46% of the individual distributors hail from B30 cities as on March 2020. Of the 87,630 registered individual distributors, 40,418 are from B30 cities while the remaining 47,212 or 54% distributors are from T30 cities.
“Investors in large cities have an option to approach bank and wealth managers with their investment related matters but people in small cities depend on MFDs for advice on mutual funds. These distributors bring in retail money from B30 cities, which stays with the industry for long term,” said a senior official from a large fund house requesting anonymity.
Seconding his views, Jimmy Patel, MD & CEO, Quantum Mutual Fund believes that the industry should encourage B30 distributors to bring in more retail investors through training programs.
However, given the large population in B30, density of distribution channels in these locations is far from sufficient. The AMFI-BCG report, released last year, shows that nearly 90% of Indian households are located in B30 cities.
To bring new MFDs to the industry, the AMFI-BCG report suggests that SEBI can look at concept of “tied distribution” for new MFDs. This means AMCs who bring in new MFDs can work exclusively with them for some time to support them in their initial days.
Apart from individual distributors, B30 cities has 6,836 other distributors including senior citizens, new cadre and corporate.
Currently, there are 44,043 registered EUIN holders including corporate employees and distributor employees in B30 cities.
