How much do mutual fund distributors make?SEBI norms require the Association of Mutual Funds of India (AMFI) to disclose the commissions of distributors who get more than Rs 1 crore in commission from all fund houses or more than Rs 50 lakh from a single fund house. In 2015-16, 497 distributors qualified under these criteria. In 2016-17, the list expanded to 732 distributors. In 2017-18, the list has further swelled to 979 distributors.

Collectively, these distributors manage about Rs 9.21 lakh crore which is about 40% of the total mutual fund industry AUM of about Rs 22.6 lakh crore. These distributors raked in a total fee of Rs 8,533 crore in FY 2017-18, just shy of 1% of AUM. The commission ranges from 0.5% to 2% based on the nature of the product with debt funds offering lower end of the range. The list is dominated by India’s big private banks and one large non-bank distributor. Here are the top 10 distributors.

Distributor Commission (Rs Crore) FY 18 AUM (Rs Crore) FY 17 AUM (Rs Crore)
NJ India Invest Pvt Ltd 787 50,157 30,958
HDFC Bank Limited 641 63,370 45,814
State Bank of India 558 42,697 19,944
Axis Bank Limited 538 45,937 35,650
ICICI Bank Limited 470 38,262 27,964
ICICI Securities Limited 317 29,811 20,310
Kotak Mahindra Bank Limited 274 40,307 27,384
Citibank N.A 249 30,084 26,209
Prudent Corporate Advisory 218 13,997 8,122
Standard Chartered Bank 185 17,598 14,032

These top 10 distributors account for 40% of the total money managed by these 979 distributors and 50% of the total fee income earned. The higher fee income is a result of the strong bargaining power that they have with mutual funds.

The Online Distribution Space

Online distributors are growing rapidly but still have to make their presence felt in the overall distribution space. The largest of these, Funds India (fundsindia.com) managed Rs 2,587 crore in FY 2016-17. Its AUM almost doubled to Rs 4,253 crore in FY 2017-18. Scripbox (Scripbox.com) saw its AUM swell from Rs 233 crore to Rs 584 crore, a 150% growth. Wealthapp, another online player, made a debut on the list with an AUM of Rs 119 crore.

Author
Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at neil@rupeeiq.com.