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Data released by SEBI regarding assets managed by portfolio managers have taken managers themselves by surprise. Not only do the figures reveal an increase in the number of clients under the advisory portfolio but they have also indicated an increase in the number of clients under the discretionary portfolio.
“There may have been an increase in the number of people opting for the advisory portfolio but the increase in the number of discretionary clients is surprising,” said a portfolio manager.
There is a very thin line of difference between advisory and non-discretionary clients. Non-discretionary services are the ones in which managers involve the client in the decision making process. Advisory services are the ones where managers advise their clients about investing.
The number of clients under the advisory portfolio has increased to 9,217 at the end of October this year. This can be compared with the 8,537 clients under the advisory portfolio at the end of September 2011. The number of clients under this portfolio was 8,243 at the end of January. The AUM for advisory clients at the end of September was Rs 81,876 crore. This has increased to Rs 87,109 crore at the end of October 2011.
The increase in the number of discretionary clients in October has been significant, said many portfolio managers.
There were 64,604 discretionary clients as at end September, against 70,524 at end of October.
“With the volatility in the market, it is true that many people are opting to be advisory clients as it gives them control over their assets. It is hard to understand the increase in the number of discretionary clients,” said Mr Shashank Khade, Executive Vice-President (PMS), Kotak Securities.
“It may be possible that this increase in the number of clients is on the debt side but on the equity side it (the increase) may not have been the case,” he said.
Although the number of clients has increased under the discretionary side, the AUM has decreased to Rs 1,58,208 crore in October from Rs 1,63,649 crore in September.
However, the AUM on the listed equity side for discretionary clients has increased to Rs 15,504.29 crore in October from Rs 13,832.85 crore.
On the plain debt front, the AUM has decreased to Rs 1,31,304.18 crore in October from Rs 1,32,443.73 crore in September. Structured debt has increased to Rs 1,624.98 crore in October from Rs 1,543.08 crore in September, according to SEBI data.
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