"We trust that you will avoid using harsh language and will refrain from making
unsubstantiated allegations against individuals and firms. Your constructive feedback
and opinions are very valuable to all of us in the industry. "
IF SEBI BRINGS RIA FOR ALL PRODUCTS UNDER SEBI IS A GREAT MOVE. DEALER CAN ADVISE TO BUY ICICI BANK WITHOUT RIA LICENSE BUT MFA CAN NOT ADVISE TO BUY EVEN ICICI LIQUID FUND/BALANCED FUND/ETC IS A BIG QUESTION. IT IS TIME TO THINK, BEFORE IT BECOMES TO LATE.
It has been correct fact. I think it is very competitive also for investors. Ifa are also providing lot of facility &services to investors. Ifa also gide them in baf times & help them reduce loss. Even in many cases direct investors lose much more in form of at times of beer market. Plus there cost of operation is some time more than the commission they would have paid.
I dont understand the Direct option, on one hand SEBI has made the training and certifications mandatory for distributor and Advisor and other hand SEBI lets investor to burn their hands without any knowledge of MF and market. Why dont they need a certification? Just to save that 0.33% commission? There should be only one medium of investment either RIA or distributor and the commission/fee should be paid through AMC. If a person is willing to invest 500 in MF through SIP and RIA is charging 1000 rs, how do you think he will be happy to pay??
The other thing is that Indian market is a relation based market and we cannot ask our known/relative/friend about the advisory fee.
FIFA IS DOING EXCELLANT JOB TO FIGHT OUR RIHTS.A LOT OF THANKS TO FIFA REPERESENTIVE
Is indeed the cancer( of upfront commissions) on the way out? The ground reality seems to indicate otherwise. Total upfront commissions (B-15 incentive plus upfront commissions) that are being paid to some of the big distributors like banks and NDs is in the range of 5-7% or even more. If B-15 incentive is paid in only Trail format, we are quite sure IFAs would get a minimum Trail of 1.75% or even more. Why isnt the B-15 incentive being paid in only Trail? If upfront commissions are banned, SEBI would not have taken these harsh steps. Why blame the regulator, when big distributors(mostly banks and NDs, which may also include some big IFAs) are not willing to let go of upfront commissions?
You have excellently brought out the points of FIFA. CEO of Sundaram Mutual Fund has also said that around 80% of business comes through IFAs. Is SEBI understands the reality or only wants to push their agenda to make the mutual fund investors, IFAs and the industry to suffer? Let SEBI understands that they are not the sole custodian of peoples money, as IFAs and AMCs are all working in the interest of investors for their well being and promoting the products.
Very well drafted, truly admire your writing skills & art of presenting facts in a objective oriented manner.
I think we should approach now to both Finance Minister & PM. Let them know how a Chairman of One Regulator is un-responsive and tyring to push something which is not relevant at this point in time.
Good presentation by FIFA to SEBI CHAIRMAN, but why not understand the pain of IFA Of MUTUAL FUND. WE ARE LIVING IN INDIA, NOT IN U.S OR ENGLAND, SO DO NOT FOLLOW THE SAME RULE OF THEM IN INDIA. 80% APPROX. PEOPLE IN INDIA DO NOT UNDERSTAND THE MEANING OF MUTUAL FUND INVESTING. THINK ABOUT IT THE COMING REGULATION FOR MUTUAL FUND ADVISORS AGAIN AND AGAIN. PEOPLE OF INDIA ARE ALREADY LOOSING THEIR MONEY IN SHARE MARKET REGULARLY AND NOW PREPARE FOR LOOSING THEIR MONEY IN MUTUAL FUND THROUGH DIRECT IMVESTMENT.
Excellent job FIFA , good
Excellent article by Vijay Venkatram. Also, sterling work by FIFA in putting facts before the regulator.
In fact investors are not bother about what commission is being paid to distributors when we explain what we get out of distribution. They are more interested in getting the service and timely advice but SEBI purposefully creating and making so many things to divert them from regular to direct plans.
What is being said in the letter "mis-selling Vs Mis-buying" will play the big role due to hasty decision of SEBI and it will have adverse impact on MF industry.
SEBI IS THINKING LINE OF MONEY DEMONIZATION IN INDIA. ERADICATION OF IFA AND DISTRIBUTION SYSTEMS.HA..HA..JAI SRIRAM
If SEBI understands facts and figures ,then they are investor friendly otherwise they are ego friendly.
Data suported by fifa is self explanatory ,where qualified individuals ate helpings & educating them.
Where is irrelevant questioning forcing ifa for adoption of new way of earnings.
Let them make exercise for buildings national interests & makes individual wealthy.
very minutely thought about datas.exzelent job by FIFA
Excellent job FIFA , Well-done
AMCs are not manufacturers / Producers , but they are Asset Managers, assets of Investors.
IFAs are not Distibituors / Dealers , they are intermediaries connecting Investors & Asset Managers.
Scheme is not a product but an investment option in front of Investors.
AMCs & Distributors are professionals and depend on Investors.
There is no point in describing AMCs & IFAs in a Manufacturer & Distributor relationship Context as none of them Invests in product manufacturing, except some initial setup & administrative costs.
So let professionals be professionals and every body in the value chain charge a Flat Fee & Performance fee.
Why only IFAs, why not AMCs also ????
VERY GOOD ARTICLE.IT IS BETTER TO PUT PRESSURE ON THE COMING NEWSEBI CHIEF.
In the name of Investor protection , SEBI is tightening the screws for IFAs.
But they should remember that it is Investors money that is feeding AMCs & Distributors.
So, first AMCs should start charging Flat Fee for managing funds on behalf of clients. And then they can charge some % as expenses or Mgmt Fee if the NAV grows, if it does not then they should be content with a flat fee.
Will AMCs be made to implement this ?
Why should they be allowed to charge a % tage as expense when every other stake holder is forced to collect a Fees..
Let the Scheme perform and AMCs charge Management fee...
Very well written article. Keep it up.
All this is happening due to AMCs support for the direct mode. But dont worry, the same AMCs change the SEBI policies after get strucked. They are thinking that they can run the business with the support of staffs. After some time due to pressure all prforming staffs will switch to other places.Then they shift their policies and come behind us. Who is SEBI chairman. Practically he is from AMC and knows all the IFAs problems and when he was with UTI he stands with all IFAs. But after becoming SEBI chairman, he has changed due to pressure of AMCs chiefs. Let us wait united and well suceed.
Well done FIFA for putting the IFAs point across. Government has to realise that for this industry to grow more the IFA and Investors relationship should not be disturbed. It is the efforts of an IFA which ensure the investors stay invested in volatile times.
Hope common sense prevails and the Mutual Fund Industry flourishes.
Excellent letter, and a good summary. Thanks!
U.K.SINHA wants to destabilize MF industry to push his own thoughts . Without IFA support, this industry would not have grown to these level. See the fate of Govt. Own products NPS , Inspite of giving Rs 50000 extra exemption . it has not reached the masses. You can not attract investors with TV ad and media ad. Only personal interaction will give confidence to invest in MF and financial products. SINHA THOUGHTS ARE SUBJECT TO GREAT MARKET RISK. LET HIM READ RIA RELATED DOCUMENTS BEFORE IMPLEMENT IT.
UK Sinha doing too much .India already facing domestic job issues theses small house also create jobs . Customer are not even ready for investments without pushing them hard . We are talking fee base commission?