Entry of new MFDs shrinks due to lockdown in FY 2021

The latest AMFI data shows that the number of new individuals joining MF industry has declined 35% in FY 2020-21. The total number of new ARN registration under individual category has come down to 5,601 in FY21 compared to 8,594 in FY20.

This is largely due to lockdown situation and lack of digital infrastructure to conduct mandatory NISM examination. In fact, the industry has added just 15 new individuals between April and May 2020.

However, with NISM launching online examination, the new registration went up sharply to reach close to 500 new registration per month from September. Later, the industry witnessed over 1100 and 1400 new registration in February and March after the ease of lockdown restrictions in many states.

Experts believe that the MF industry should focus on increasing awareness about mutual fund distribution business along with ‘Mutual funds sahi hai’ campaign. G Pradeepkumar, CEO, Union MF feels that industry should convey benefits of trail income in the long term to individuals. He said, “The MF industry is very under penetrated and offers a lot of untapped opportunities for distributors if they remain focussed,” he said.

Talking about how new individuals can acquire new clients in the distribution business, he said, “New MFDs should start their business by focusing on a particular section of society or community like doctors, teachers and so on. This way they will be able to create a niche model and attract more referrals.”

As on March 31, 2021, there are 1.11 lakh ARN holders including individual (85.41%), senior citizens (8%), new cadre (0.03%) and corporate (6.55%).