MFDs bring in 83% of the retail AUM in MF industry as on March 2021. Of the total retail AUM of Rs.16.60 lakh crore, MFDs brought in close to Rs.14 lakh crore in March 2021, shows the red herring prospectus of Prudent Corporate Advisory.
Further, quoting the CRISIL research, the prospectus said that the share of distributors in life and health insurance is in the range of 90-93% as of March 2021.
Clearly, distributors drive retail business for both the industries – mutual fund and insurance.
A closer analysis of the data shows that mutual funds account for 10% of the total AUM of retail financial products. Of the total retail AUM of Rs.161 lakh crore as on March 2021, mutual funds account for Rs.16.6 lakh crore. In 2016, the share of mutual funds in retail financial product was close to 6%.
The prospectus says, “Financial product distributors play a critical role in the market ecosystem in India. CRISIL Research shows that the Indian retail financial products distribution industry grew at a CAGR of 10% over March 2016 to March 2021 and touched Rs.161 trillion as of March 2021. Retail mutual funds category posted the highest CAGR (22% over March 2016 to March 2021) amongst other retail financial products category and touched Rs.17 trillion as of March 2021."
