Prudent has around 7,000 sub brokers across India.
Thanks to mark to market gains and fresh sales, Gujarat based national distribution firm Prudent Corporate Advisory’s assets under advisory (AUA) reached Rs. 5,000 crore last week.
As on March 2014, Prudent was managing Rs. 3,594 crore AUA. It earned a commission of Rs. 35 crore in FY 2013-14. The company has added Rs. 1,406 crore assets in eight months out of which fresh sales accounted for nearly Rs. 800 crore while the remaining increase was due to mark to market gains.
With the turnaround in market, the company is seeing increased participation from investors in equities. Prudent currently clocks net sales of Rs. 60-65 crore every month.
National distributors typically operate on a sub-broker model. They share a certain percentage of commission with their partners, which is usually 80:20. The company operates from 50 offices in India and has about 7,000 sub brokers out of which 4,500 are active, claims Sanjay Shah, Managing Director, Prudent Corporate Advisory.
“Debt funds are not so lucrative for distributors to sell because of the low commissions. As equity markets revive, distributors will also start getting active because they are more inclined to sell equity funds,” says Sanjay Shah, Managing Director, Prudent Corporate Advisory.
When asked about the impact of direct plans, Sanjay says that direct plans have indeed impacted distributors. “Distributors have lost some amount of business to direct plans. I believe direct plans will only get popular in the days to come. However, the entire pie will grow and distributors should be able to value add to clients in order to sustain in a growing market.”
Sanjay said that the company’s core focus is on distribution of mutual fund schemes.
The company is also into distribution of other third party products like real estate, insurance, fixed deposits and broking.