What percentage do top distributors make on assets under advisory?

An analysis of commission disclosure of the top 50 distributors shows that majority of MFDs receive less than 1% as percentage of the total assets under advisory. The data shows that these distributors earn Rs.7700 crore on the total assets of Rs.9.88 lakh crore as on March 2023, which is 78 bps.

Of the top 50 distributors based on AUM, only 7 MFDs command commission to AUM ratio of over 1%.

Citibank N.A. commands highest commission to AUM ratio of 2.85%. Notably, the bank has witnessed massive decline in its AUM from Rs. 24,125 crore in FY 2021-22 to Rs 4,120 crore in FY 2022-23. However, its gross commission declined marginally from Rs.138 crore to Rs.118 crore.

NJ IndiaInvest and Prudent Corporate Advisory Services command the second and third highest commission to AUM ratio of 1.24% and 1.10%, respectively. Likewise, Bank of Baroda and IIFL Wealth Prime (now known as 360 ONE Prime) command the next highest commission to AUM ratio of 1.09% and 1.04%, respectively.

Apart from these five, two more distributors receive commission of over a percent. These are Anand Rathi Wealth (1.03%) and Geojit Financial Services (1.02%). 

Of the remaining 43 distributors of the top-50 list, 31 distributors receive commission in the range of 0.52% to 0.89%.

Please note that for the purpose of our analysis, we have considered the top 50 distributors (in terms of average AUM for FY 2022-23) and simply divided their gross commission by average AUM. This is merely an average figure and in no way an indication of how much commission these distributors actually receive from AMCs.

Here is a tabulation of commission data for each of these top 50 distributors.

* IIFL Wealth Distribution Services (now known as 360 ONE Distribution Services) demerged from IIFL Wealth Prime (now known as 360 ONE Prime), an NBFC on March 14, 2023 to form an exclusive distribution arm.