Check this commission disclosure link on AMFI website. The biggest earners FY 15/16 are (the list has over 500 distributors)
- NJ India invest : Rs 362 crores
- HDFC Bank: Rs 261 crores
- ICICI Bank: Rs 169 crores
- ICICI securities: Rs 111 crores
All distributors together, a massive Rs 3650 crores was paid out as commissions last year on mutual fund investments to distributors. Only retail investors use distributors, so yeah all of us together have paid this massive amount.
What is also ridiculous is that companies like ICICI direct charge an additional transaction fees over and above the commission they earn for distributing the mutual funds. The money earned from these transaction fees would be over and above the Rs 111 crores ICICI securities would have earned selling MF.
Check this link on ICICI direct. Rs 100 to Rs 500 as additional transaction fees!
ICICI bank and others have also shared a link on typical commissions they earn for selling mutual funds. Check this link.
Check out the commission paid if clients are outside the top 15 cities (B-15), upto 2.75% upfront and upto 1.25% as trail commission every year. No wonder no one is creating awareness about direct mutual funds. This seems like a great way for distributors to earn without the client ever getting to know that so much money from his investments are going back as commission not just upfront but every year. Since no money is directly taken, clients don’t get to know, and ignorance is bliss.