Assets of the financial distribution industry are seen rising three-fold by 2020, according to a latest report by Financial Intermediaries Association of India (FIAI) and Crisil.
Within the financial product universe, mutual funds have the potential to grow the fastest as investors move away from traditional products towards market-linked ones for long-term wealth creation, says the report.
Currently, assets of the Indian mutual fund industry stand at around R12 lakh crore. According to the study by FIAI-Crisil, the industry has a potential to achieve a 23% annualised growth over the next six years to R37 lakh crore.
Assets under management (AUM) of mutual fund distributors could touch R23 lakh crore from R8 lakh crore by 2020. “Independent financial advisors (IFAs) and national distributors through technology-enabled-sub-broker models are expected to expand their reach and presence in the B-15 cities to capture the biggest chunk of this growth opportunity,” says the report.
Even the insurance sector is likely to grow at decent pace in the years to come.
According to the report, Life Insurance Corporation of India will continue to stay ahead of the private sector in terms of market share. However, the private sector will grow faster.
Life insurance premiums are projected to more than double to nearly R9 lakh crore by 2020 from R3.14 lakh crore in 2014. Premiums of non-life insurance are expected to grow two-and-a-half times from R70,610 crore in 2014 to nearly R1.8 lakh crore by 2020.