35% MFDs are active in the MF industry

Of the total 94500 individual MFDs, 33050 MFDs or 35% of the total individual MFDs manage assets of over Rs.1 crore as on March 2021, shows a report titled ‘Mutual Fund Trend’ released by IDFC Mutual Fund. The report captures MFDex data, which covers 96% of the overall industry.

The report further shows that nearly 16,000 MFDs or 17% of the total MFDs have assets under advisory in excess of Rs.5 crore. These MFDs have been making meaningful money from the MF distribution profession. 

The report shows that close 4700 MFDs manage assets in excess of Rs.25 crore. This indicates that 14% of the total active distributors (defined as those having a minimum AUM of at least Rs.1 crore) earn gross commission of more than Rs.20 lakh annually, shows an analysis of the latest distributor AUM.

We have taken trial commission of 0.80% to arrive at the gross commission earned by distributors.  However, the actual number may go up as the data covers AUA 95% of the total industry AUM. That means, 81% of the active MFDs or 28,400 distributors earn less than Rs.20 lakh annually and are exempted from paying GST. 

Nearly 30,000 MFDs manage equity assets in excess of Rs.1 crore. This indicates almost 86% of the total active MFDs have been distributing equity funds.

Similarly, MFDs managing over Rs.1 crore of assets in debt funds were 8200 as on March 2021. This shows that 23% of the active MFDs distribute debt funds.