Distributors flock to MFs as returns, flows improve

An improved showing of mutual funds (MFS) is helping the industry attract distribution talent at a brisk pace.

- ABHISHEK KUMAR

The industry has onboarded a net of 11,600 individual distributors in the first seven months of 2023-24 (FY24) compared to just 5,555 distributors in the whole of 2022-23 (FY23), according to data from the Association of Mutual Funds in India. Like most financial products, MFS also have significant reliance on individual distributors to sell their products, even as digital platforms are gaining popularity.

As of October 2023, distributors, banks included, accounted for 57 per cent of the 46.7 trillion assets under management (AUM) of the MF industry. The rest of the AUM was in direct plans, which are mostly sold by online platforms. According to MF executives, the rise in interest in MF distribution is a result of the growing acceptance of MFS among the masses and the rising commission pool.