Ban on upfront commission has impacted distributors’ earnings.
Even as the assets under advisory (AUA) of top distributors increased marginally by 1% i.e. from Rs.5.54 lakh crore to Rs.5.62 lakh crore, gross commission earned by them reduced drastically by 24% from Rs.4739 crore to Rs.3619 crore last financial year.
Largest distributors by commission earned
Among the top 20 distributors, NJ India remained the largest mutual fund distributor in terms of gross commission. NJ India earnings declined from Rs.808 crore in FY 2018-19 to Rs.777 crore in FY 2019-20.
Axis Bank remained the second largest distributor with gross commission earned close to Rs.416 crore.
SBI pipped HDFC Bank to become the third largest distributor. The bank earned gross commission of Rs.375 crore while HDFC Bank received gross commission of Rs.294 crore.
Not a single distributor saw positive growth last financial year. Among the distributors who recorded the lowest negative growth in commission earnings in percentage terms were Prudent Corporate Advisory, NJ, Anand Rathi Wealth Services and Geojit Financial Services.
Remember that net earnings of these distributors are less than the gross commission since they incur expenses on running their businesses.
|
MF distributor |
Gross Amount paid |
Change |
Change in % |
|
|
2019-2020 |
2018-2019 |
|||
|
NJ IndiaInvest |
777.00 |
808.00 |
-31.00 |
-4% |
|
Axis Bank |
416.00 |
556.00 |
-140.00 |
-25% |
|
State Bank of India |
375.00 |
488.00 |
-113.00 |
-23% |
|
HDFC Bank |
294.00 |
497.00 |
-203.00 |
-41% |
|
ICICI Securities |
278.00 |
319.00 |
-41.00 |
-13% |
|
Prudent Corporate Advisory Services |
230.00 |
235.00 |
-5.00 |
-2% |
|
ICICI Bank |
186.00 |
355.00 |
-169.00 |
-48% |
|
Kotak Mahindra Bank |
159.00 |
255.00 |
-96.00 |
-38% |
|
Anand Rathi Wealth Services |
115.00 |
121.00 |
-6.00 |
-5% |
|
Citibank N.A |
115.00 |
182.00 |
-67.00 |
-37% |
|
IIFL Wealth Management |
100.00 |
176.00 |
-76.00 |
-43% |
|
Hongkong & Shanghai Banking Corporation |
100.00 |
114.00 |
-14.00 |
-12% |
|
Standard Chartered Bank |
77.00 |
151.00 |
-74.00 |
-49% |
|
Julius Baer Wealth Advisors (India) |
73.00 |
91.00 |
-18.00 |
-20% |
|
Bajaj Capital |
72.00 |
92.00 |
-20.00 |
-22% |
|
Karvy Stock Broking |
67.00 |
88.00 |
-21.00 |
-24% |
|
Pioneer Client Associates |
52.00 |
59.00 |
-7.00 |
-12% |
|
JM Financial Services |
51.00 |
62.00 |
-11.00 |
-18% |
|
Geojit Financial Services |
44.00 |
46.00 |
-2.00 |
-4% |
|
Wealth India Financial Services |
40.00 |
46.00 |
-6.00 |
-13% |
|
Total |
3619 |
4739 |
-1120 |
-24% |
Assets under advisory
The assets under advisory are an indicator of how much commission the distributor earns. For instance, Kotak Mahindra Bank had AUA of Rs.35567 crore and earned Rs.159 crore (0.45% of the assets under advisory). AMFI data shows NJ India, Axis Bank and ICICI Securities received over 1% of commission from the assets they managed last financial year.
In terms of AUA, while SBI stood at third position in terms of gross commission received last financial year, it pipped HDFC Bank to hold the mantle of being the largest distributor. SBI’s MF AUA increased from Rs.64280 crore in FY 2018-19 to Rs.81529 crore in FY 2019-20.
NJ India was at second position in terms of AUA ranking with AUA of Rs.71561 crore, followed by HDFC Bank at Rs.71412 crore and Axis Bank at Rs.50126 crore.
Among the top 20 distributors, SBI recorded highest growth in its AUA both in terms of absolute and percentage growth last financial year. Its AUA grew by over Rs.17250 crore or 27% to reach AUA of Rs.81529 crore.
|
Name of the ARN Holder |
Average Assets under Advisory |
Change |
Change in % |
|
|
2019-2020 |
2018-2019 |
|||
|
State Bank of India |
81,529 |
64,280 |
17,249 |
27% |
|
NJ IndiaInvest |
71,561 |
62,947 |
8,614 |
14% |
|
HDFC Bank |
71,412 |
72,944 |
-1,532 |
-2% |
|
Axis Bank |
50,126 |
52,923 |
-2,797 |
-5% |
|
ICICI Bank |
40,585 |
41,803 |
-1,218 |
-3% |
|
Kotak Mahindra Bank |
35,567 |
37,555 |
-1,988 |
-5% |
|
ICICI Securities |
33,359 |
34,510 |
-1,151 |
-3% |
|
Citibank N.A |
25,884 |
28,664 |
-2,780 |
-10% |
|
Prudent Corporate Advisory Services |
22,637 |
19,033 |
3,604 |
19% |
|
IIFL Wealth Management |
18,990 |
30,568 |
-11,578 |
-38% |
|
Hongkong & Shanghai Banking Corporation |
18,842 |
18,107 |
735 |
4% |
|
Standard Chartered Bank |
16,084 |
17,905 |
-1,821 |
-10% |
|
Julius Baer Wealth Advisors (India) |
13,885 |
13,838 |
47 |
0% |
|
Anand Rathi Wealth Services |
12,922 |
11,242 |
1,680 |
15% |
|
JM Financial Services |
11,078 |
11,926 |
-848 |
-7% |
|
Karvy Stock Broking |
10,347 |
10,170 |
177 |
2% |
|
Bajaj Capital |
9,827 |
10,128 |
-301 |
-3% |
|
Pioneer Client Associates Private |
6,783 |
6,319 |
464 |
7% |
|
Wealth India Financial Services |
6,123 |
5,440 |
683 |
13% |
|
Geojit Financial Services |
4,562 |
3,815 |
747 |
20% |
|
Total |
562103 |
554117 |
7,986 |
1% |
