The 329 largest distributors income from selling mutual funds rose 9% from Rs. 2,367 crore in FY12-13 to Rs. 2,582 crore in FY13-14.
Citibank, which manages assets under advisory
of Rs. 15,792 crore, retained
its top position of being the largest mutual fund distributor by commissions
earned from mutual funds. It earned a total of Rs. 181 crore in FY13-14, up 10%
from Rs. 165 crore in FY12-13.
HDFC Bank’s commissions dipped marginally by Rs. 2 crore. However, it managed to retain its second position. HDFC Bank earned Rs. 159 crore in FY13-14 as against Rs. 161 crore the previous year.
Surat based national distributor NJ India pipped HSBC Bank to become the third largest mutual fund distributor.
NJ India earned Rs. 149 crore while HSBC Bank earned Rs. 83 crore. With an active IFA base of 9,000 spread across India, NJ India manages AUM of Rs. 13,433 crore in mutual funds. Neeraj Choksi, Jt. Managing Director, NJ India Invest is optimistic about the growth of the industry. “NJ India has one million investor base in mutual funds and 7 lakh active SIPs. We will keep working on growing our network of IFAs. The increase in investment limit in 80 C will result in more inflows in ELSS,” said Neeraj.
HSBC Bank’s commissions from selling mutual funds dropped drastically by 61% from Rs. 144 crore in FY12-13 to Rs. 83 crore in FY13-14 due to a fall in its assets under advisory. HSBC Bank’s assets under advisory fell from Rs. 17,635 crore to Rs. 13,341 crore in FY13-14.
“It’s because HSBC has not sold closed-end funds. Closed-end funds paid commissions as high as 4%,’ said the sales head of a bank sponsored fund house.
“HSBC Bank’s incentive structure and selling practices have undergone a change. It has shifted focus from transactions to AUM retention and thus its commission has dropped,” said Mumbai based advisor who manages assets of Rs. 400 crore.
Vinod Jain of Jain Investment said that the commission payouts have increased due to higher focus on selling income, accrual, capital protection and closed end funds by distributors. “Distributors sold a lot of closed end and capital protection funds from October onwards. Income funds also attracted a lot of investors’ attention,” said Vinod.
The highest increase in commission was witnessed by SPA Capital. Its commissions went up by 140% from Rs. 50 crore in FY12-13 to Rs. 120 crore in FY13-14. SPA Capital’s assets under advisory went up from Rs. 15,616 crore in FY12-13 to Rs. 20,980 crore in FY13-14.
IIFL Wealth Management saw the second largest growth in its commissions. Its earnings went up from Rs. 70 crore in FY12-13 to Rs. 130 crore in FY13-14.
Overall,
the commission payout to 329 largest mutual fund distributors increased by 9%
from Rs. 2,367 crore to Rs. 2,582 crore last fiscal. 8 out of the top 15
distributors were banks.
