Mutual fund distributors' commission soar by 26% in 2012-13

Commission earned by mutual fund distributors surged by 26% to Rs 2,367 crore in 2012-13, driven by improved market conditions, even as their number fell during the year.

 

According to latest data available with Association of Mutual Funds in India (AMFI), the total commissions earned by 332 distributors stood at Rs 2,367 crore in 2012-13, while banks such as Citibank, HDFC Bank and HSBC Bank topped the chart with highest commissions.

 

This was 26% higher than the total commission of Rs 1,883 crore given by the fund houses to their 373 distributors during the fiscal year 2011-12.

 

Market participants attributed the spike in commission to better capital market conditions last fiscal coupled with measures taken by Sebi for the benefit of the sector.

 

Interestingly, many distributors earned commissions despite net outflows of the investor money through their accounts.

 

There were seven banks among the top-ten mutual fund distributors in terms of commissions paid to them.

 

As per the latest disclosure of commission and expenses paid by various fund houses to their distributors, Citibank led the list earning a commission of Rs 165 crore followed by HDFC Bank (Rs 160.88 crore), HSBC Bank (Rs 144 crore), NJ IndiaInvest (Rs 124 crore) and Standard Chartered Bank (Rs 88 crore).

 

Besides, there are four other banks among the top-ten commission earners - Standard Chartered Bank, Axis Bank, ICICI Bank and Kotak Mahindra Bank.

 

The commission paid to the top 20 mutual fund distributors went up by 23% to Rs 1,448 crore in the past fiscal ended March 31, 2013 from from Rs 1,176 crore in 2011-12.

 

During 2012-13, mutual funds' assets under management (AUM) rose by a staggering Rs 1.51 lakh crore or an increase of 23% to touch Rs 8.2 lakh crore.