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MF News A single license for distributors to sell MFs, insurance and NPS: RBI committee

A single license for distributors to sell MFs, insurance and NPS: RBI committee

RBI committee suggests uniform guidelines for advisors across all financial products
Rosevina Gonsalves and Nishant Patnaik Sep 6, 2017

In an effort to reduce confusion among investors dealing with multiple advisors to buy mutual funds, insurance, NPS and so on, RBI committee headed by  Dr. Tarun Ramadorai, Professor of Financial Economics, Imperial college London, has proposed bringing uniformity in guidelines for advisors across all financial products.

In other words, the committee wants advisors to offer all the financial products such as insurance, mutual funds, NPS and AIFs with a single license.

Currently, all the financial regulators – SEBI, IRDAI and PFRDA have different rules and regulations for their intermediaries and advisors registered with them. The committee has recommended introduction of an independent body, which can be managed by all these regulators to form a unique guidelines for financial advisors.

In its recommendation, the committee has said, “We propose that regulation should be uniform across advisors, rather than based on the specific sectors or products that advisors sell, so as to enable advice to households about their entire balance sheets.”

The committee has further proposed introduction of Self Regulatory Organisation or SRO to grant license to distributors. It said, “We propose the creation of a unique ‘license number’ for financial advisors to replace the diversity of current registrations such as the ARN, RIA, RA, and EUIN number. An SRO-driven regulatory system for financial advisors across all products will use this unified identification number.”

 

 

 

 

 

 

19 Comments
jaideep · 2 weeks ago
Till the time regulators actually listen to the distributor's point of view and stop treating them as thieves and scoundrels, every regulator and its activities are not going to reflect the business reality. It amazes me that the regulator on one hand calls mutual funds risky products and yet, with all enthusiasm, recommend that investors go in for direct plans, as the distributor fees take "big chunks" out of an investor's returns ! We need to have more industry practitioners in these regulators/ committees to make sure that the interests of both investors and distributors are balanced and taken care of. Instead we have bureaucrats with fat salaries who do not seem to understand that in a business, you have no fixed income, which means a distributor's income can fall drastically during market declines, while all these bureaucrats can see is some hypothetical super profits ! Anyway, super regulators filled with bureaucrats are to my opinion a far worse solution than market specific regulators.
Haresh Gopal Vishwakarma · 2 weeks ago
We appreciate the power of thinking with regards to advisors licensing procedure & undertaking. Hope that it be incorporated asap to open a new vision towards all future endeavors be it any sectors. Advisory business is one of the golden opportunity to earn & learn various aspects of business timeline & cultured habit of growing.
SAND Financial Advisory Services · 2 weeks ago
Great initiative ???? If implementation done in fast track.
Rajesh tatia · 2 weeks ago
Great but required fast action for implement
Dhananjoy Banerjee · 2 weeks ago
Without proper training & exam maximum insurance advisor will come into MF industry . Then they miss sale MF product. Public will be misguided . industry will fall down.
Sandeep Kulwade · 2 weeks ago
Banks are already doing the same...
Reply
Arvind Kumar Suman · 2 weeks ago
exelent idea. It will stop misguiding about the product and will increase quality of service to client.
Prashant · 2 weeks ago
Sorry..this is not at all a great initiative because the idea is good but forming another regullatory body and SRO wgich basically works as a lobby for manufacturers is a bad idea. In mutual funds because of this lobby distributors are facing so much trouble. Now if they are taking care of allb roducts, our life will be miserable and we will be out of work in no time. Flipkart is starting to sell mutual funds. Now will they be advisors or distributors. And if they ate either, how credible and genuine they will be? The idea of having one license for all finamcial products is good but the companies especially insurance companies will oppose it because even a really good concept lile IMF is also dumped by them in fear that they will lose business to other companies. Please start regulating companies for which you are formed in the first place becsuse many insurance copmanies even before commission cap was removed were paying much higher to individual agents and reducing commissions for reat and showing it as a bundle so hiding the actual commissions they were paying to individual agents and nothing happened to thise companies by way of fine or penalty. Infact the licenses were to be taken from them as per IRDA regulations or guidelines but nothing like that was done.

In short i am for the idea but without these new nuisance from any regulators.
Abhishek Nair · 2 weeks ago
MF distributor is should be qualified and knowledgeable person and insurance needs only less knowledge it should not be allow to do so.
Sanjeev C. Bhatkar · 2 weeks ago
Idea of bringing uniformity in guidelines for advisors offering variety of financial products like mf , life and / non-life ( Mediclaim , Accident and other ) General Insurance products and fixed deposit ( banks / postal / company ) etc sounds excellent. RBI , through such proposal , has made it clear that individual adisors / Distributors / Agents offering services in one or more than one financial products will not be thrown out of business ( due to proposed solutions like distributor / advisor segregation , compulsion of becoming RIA etc ). Also it appears that RBI has considered small individual financial service providers as " crucial link * in bringing retail prospects to Mutual Funds , Insurance and other financial products / services. Therefore , this prolosal is a positive step by RBI.
As proposed all indivdual Regulators need not be merged under SRO. They shod carry out their regulatory responsibility in their resoective fields. SRO should look after to see that 1. Licences of Idividuals advisors are renewed in time , 2. They are completing required formalities , like , self-declaration etc. 3. They are trained regularly and updated about latest developments in financial sectors.4. Maintaining record of variety of financial products offered by individual advisors along with builsiness volume in various categories and length of experience etc. 5. Helping / Encouraging existing advisors as well as new entrants in increasing range of financial products so that they are equipped fully so as to become "true advisors " practically.
Alloting an unique licence nuber to multy-product advisors should be considered after considering all pros and cons regarding its implementation.
Prashant · 2 weeks ago
Actually they ar doing this to regulate and micromanage our commissions si that they can just destroy the distribution completely and they want the manufacturer to benefit out of this because manufacturers can not grow without distributors and regulators are working hands in gloves with them so they are being extremely precautious about bringing regulations to destroy us in such a way that business manufacturers do not get affected and we also are out.
Reply
Mihir Ashar · 2 weeks ago
After a looong time some logical sound words.
Stanislaus Dsouza · 2 weeks ago
It all depends upon how LIC responses to new system. If it doesn't agree, nobody has the courage to go against LIC.
nagaraja k · 2 weeks ago
Well said Dsouza Sir. It is LIC which has the power to regulate the regulator.
Reply
mohammed faisal · 2 weeks ago
welcome,
but we want clear about all financial product ( RBI committee headed by Dr. Tarun Ramadorai, Professor of Financial Economics, Imperial college London, has proposed bringing uniformity in guidelines for advisors across all financial products.)

WE DEMAND ALSO BRINGING RIGHT TO SELLS ANY KIND OF LIFEINSURANCE AND GENERAL INSURANCE AND HEALTH INSURANCE COMPANY PRODUCT WITHOUT ANY RESTRICTION AND NO NEED TO TAKE REG INDIVIDUAL TO EACH COMPANY UNIQUE BANK AND PAN AND ALL KIND OF DETAIL SHOULD BE TAKEN LIKE ( kyd for distributor )and reflect atomic in system ( RIGHT TO ADVISE ALL PRODUCT AS INVETOR BENIFIT NOT COMPANY BENIFIT, ) COMPARE TO LOW PREMIUM IN ADVISOR MODE THAT IS CALLED UNIFORMITY IN LICIENCE NOT ONLY MERGE ALL AND ISSUE SINGE LICENCE,
this is real favor of investor and not confuse and get right advise from advisor if distributor have choice to issue best suited as per r equirement product , across all amc and across all insurance company ,
mohammed faisal · 2 weeks ago
At time of issue combine licence should also issue right to doing any company and life insurance and

helath insurance general insurance sales right to advise any kind of produt as per investor requirement,

across the industry without any restriction, and as default issue sales licence, to advisor, and

registration at time of issue licence,

no need to take approvel from each insurance and general insurance company to doing business,
and insurance company can issue brokrage in behalf of unieque advisor code basis

and bank detail also get from licence authority to credit brokrage ,

at time of unique licence issue authority can obtain bank detail of advisor to credit

brokrage and inform across all insurance compnay,

any company also touch and inform to advisor any kind of information vis reg email and mobile no basic to promote product ,and brokrage information, on reg email id,







mahesh pai · 2 weeks ago
please don't creat one licencing policies for advisers & insurance Agents since it will face more hardship for insurance cos who are already facing lot of problem as far as their businesses are concern. their market share are falling drastically.protect interest of insurance sector by keeping separete identity of insurance agents who sell insurance products for their livelihood,since insurance has not grown in india as it should have been after it was open for private sectors, thanks.
Nagaraja K · 2 weeks ago
Well said. I am not able to understand why insurance industry is facing this problem. We had the insurance industry since 1956 and 1972. Private companies came only after year 2000.
Reply
YOGENDRA DOSHI · 1 week ago
SINGLE LICENCE MOVE IS REALLY GOOD. I
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