Misbah Baxamusa On The Changing Landscape Of Mutual Fund Distribution In India

In 2026, the Indian mutual fund industry stands at a pivotal junction, driven by a surge in retail participation and a shift toward digital-first distribution. As CEO of NJ Wealth, one of the country’s largest mutual fund distribution platforms, Misbah Baxamusa provides a unique vantage point on these structural changes.

With a career defined by bridging the gap between sophisticated financial technology and human-led guidance, he has been instrumental in NJ Wealth’s mission to professionalize and digitize the distributor community. In this conversation, Baxamusa outlines the evolving responsibilities of distributors, the impact of paperless execution, and the necessity of recalibrating investor expectations in a maturing market.

1. As we move into 2026, what new trends or opportunities do you foresee for mutual fund distributors in India?

As we move into 2026, several key trends and opportunities are poised to reshape the mutual fund distribution landscape in India. Rising financial literacy, increasing access to information and growing aspirations for wealth building will continue to drive retail participation beyond metros, making Tier-2 and Tier-3 markets will emerge as major growth engines. Distributors who focus on education-led engagement and build trust in these markets will unlock significant opportunities.

Investors are increasingly seeking investment guidance aligned with specific life financial needs such as retirement, children’s education or home ownership rather than generic returns. MFDs who can help investors build need-based mutual fund portfolios and communicate the long-term value of disciplined SIPs will be well-positioned. The continued rise of digital onboarding and execution, complemented by personalised financial guidance, will empower MFDs to manage larger client bases without compromising on service quality.

2. Could you elaborate on the increase in the number of mutual fund distributors (MFDs) in India? What factors do you attribute to this growth?

Over the last financial year, India’s mutual fund distribution landscape witnessed a growth in the number of ARN holders by 12.84%. The distributor base increased from 1,73,664 as of 31 December 2024 to 1,92,062 by 30 November 2025. A key contributor to this growth is the increasing awareness of mutual funds in India, thanks to investor awareness campaigns like ‘Mutual Funds Sahi Hai’. (Source - AMFI)

Moreover, there is a stark underpenetration of the number of mutual fund distributors in India as compared to India’s population and growing investor base. With a limited number of distributors servicing a rapidly growing pool of investors, many professionals are stepping in to capitalise on this gap.

Finally, with mutual fund penetration in India still relatively low, especially across Tier 2 and Tier 3 cities, hence, the need for last-mile financial guidance remains strong. This widening gap between investor awareness and execution continues to create room for new distributors, supporting the upward trend in distributor numbers.

3. In your view, what role do MFDs play in promoting mutual fund investments among retail investors in India?

MFDs in India play a vital role in channelising long-term investments from investors. Their role is not limited to facilitating Mutual Fund transactions, but also involves identifying and quantifying financial needs, understanding investors’ risk profile, connecting it with their financial needs and aligning these with suitable mutual fund investment approaches. They act as a crucial bridge between the investor and

the market by simplifying complex financial concepts, setting realistic risk-return expectations, and encouraging disciplined investing through SIPs and long-term asset allocation.

More importantly, MFDs help retail investors stay invested across market cycles by providing handholding during volatility, curbing emotional decision-making, and reinforcing the importance of patience and consistency. In a market like India, where financial literacy is still evolving, MFDs play an educational role as much as a distribution one, building trust, improving participation, and channelising household savings into productive, long-term investments.

4, What initiatives is NJ Wealth undertaking to support the professional development of new MFDs, particularly those from smaller towns?

NJ Wealth undertakes multiple initiatives to support the professional development of new MFDs, particularly those from smaller towns and emerging markets. A key focus area is empowering distributors through Investor Awareness Programmes (IAPs), which help MFDs educate local communities about mutual funds, long-term investing and financial discipline. These programmes enable new distributors to build trust, establish credibility, and create awareness in markets where financial literacy is still evolving.

In addition, NJ Wealth provides structured partner training that starts from certification support and extends to in-depth learning on mutual fund products, asset allocation and need-based guidance. MFDs are also equipped with practical tools for client acquisition and retention, along with guidance on conducting investor meets and engagement activities. Together, these initiatives help new distributors build confidence, strengthen their capabilities and develop scalable, long-term businesses.

5. How has technology changed the landscape for MFDs, and what tools or platforms are proving essential for their success?

Technology has fundamentally changed the landscape for MFDs by transforming them from manual, transaction-oriented agents into digitally enabled, relationship-driven distributors. By eliminating extensive back-office paperwork and automating processes, technology has enabled a digital yet personalised business model where human guidance is supported by seamless execution. The ecosystem today favours scale, allowing a single distributor to efficiently manage thousands of clients through a 100% paperless setup with real-time transactions and visibility.

Our platforms, such as the NJ E-Wealth Account, provide investors with a single-window view of their entire portfolio across mutual funds with one-click transactions and paperless onboarding. For MFDs, our tools like the NJ Partner Desk, available on app and web, act as a command centre to track business performance, monitor live SIP flows, and access client information while on the move. UPI Autopay and e-mandates have become essential for instant SIP activation, ensuring that investor intent is converted into investment without delays associated with physical mandates.

Overall, technology has significantly reduced the cost of doing business by improving efficiency, cutting down time spent on administrative tasks and enabling MFDs to service clients from anywhere in the world. With detailed reports and insights available at the click of a button, distributors are now better positioned to focus on guidance, client engagement and long-term wealth building.

6. How has investor risk perception changed over the past year, and how should distributors recalibrate asset allocation conversations going into the next market cycle?

Over the past year, rising markets have increased investor confidence, but they have also strengthened return-chasing behaviour. Many investors are anchoring decisions to recent performance, treating double-digit returns as normal, and underestimating downside risk. As a result, risk perception has become reactive; optimistic in rallies and anxious during even mild corrections.

Going into the next cycle, distributors must shift conversations from “what is performing” to “what is appropriate.” The primary focus should be on deciding the right asset allocation based on financial needs, time horizon, and behavioural tolerance for volatility, not recent returns. Resetting expectations and institutionalising rebalancing will be critical. Asset allocation must be positioned as the core, because long-term outcomes will be driven more by disciplined allocation and investor behaviour than by product or scheme selection.

7. What advice would you offer to new entrants considering a career in mutual fund distribution, especially from Tier 2 and Tier 3 cities?

For new entrants, especially from Tier 2 and Tier 3 cities, mutual fund distribution represents a strong long-term opportunity, as these regions are increasingly contributing to India’s investment participation. The first priority should be to build trust and credibility within the local community. Creating a basic digital presence through social media and simple awareness content can help establish visibility even before the first interaction.

Rather than approaching the role of product-centric selling, new distributors should focus on need-based conversations and help investors understand how mutual funds can be used in the context of long-term needs such as children’s education, financial planning and retirement-oriented investing, while clearly communicating risks and time horizons.

A key differentiator in these markets is the combination of paperless onboarding, digital transaction facilities and efficient tools, along with the personal connect and accessibility that investors in smaller towns value. Introducing investors through small-ticket SIPs can help them start gradually, understand market behaviour and build investing discipline over time.

Most importantly, new entrants should focus on long-term engagement, service quality and client continuity rather than short-term transactions. This approach helps build sustainable practices based on recurring participation and a strong local reputation.