SEBI's Singh: MFDs Are Behavioral Anchors for Investors
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- Amarjeet Singh, SEBI Whole-Time Member, told the NJ Partners Business Training 2026 on 13 August that mutual fund distributors serve as "behavioural anchors," helping investors resist impulsive decisions like stopping SIPs, redeeming, or chasing recently top-performing schemes during market volatility.
- India's mutual fund industry AUM has reached approximately ₹85 lakh crore, more than eightfold growth from ₹10 lakh crore in 2014, with SIP assets now accounting for over 21% of total industry assets.
- SIP holding data Singh highlighted shows 34% of SIP assets in regular plans have been held for more than five years, compared with just 20% in direct plans—a gap he used to argue distributors meaningfully extend investor time horizons.
- B-30 cities now account for almost 19% of total mutual fund industry AUM, up from roughly 16% five years ago, and Singh said distributors are the channel for expanding participation in smaller towns and among first-time investors.
- SEBI, working with NISM, has simplified the certification framework for Specialized Investment Funds (SIFs), allowing certified distributors to distribute both mutual funds and SIFs under a unified credential.
- SEBI's proposed MF-only PMS framework—now under consultation—would set a ₹25 lakh minimum investment, half the conventional PMS threshold of ₹50 lakh, and could let larger distributors manage an investor's entire mutual fund portfolio including asset allocation and scheme selection.
- Singh warned about mis-selling risks and stressed that ethical distribution must remain central, urging investors to confirm their distributor explains risks, commissions, and product suitability before and after the sale.
Why it matters: For investors in smaller cities or with mid-sized ticket sizes, SEBI's proposed MF-only PMS framework halves the conventional entry threshold to ₹25 lakh and lets qualified distributors manage the entire mutual fund portfolio—not just recommend schemes—potentially reshaping how ₹85 lakh crore in industry AUM is intermediated. The 34%-vs-20% five-year SIP retention gap between regular and direct plans is the empirical lever regulators will lean on to defend the distributor-led model.
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