AMCs reduce trail commission with rationalization of TER

I like to

To reduce trail commission on old and existing assets is fully Injustice as it is a
Contract between two.

This means that the revenues of Fund house (Asset Management Fees) will not come down proportionately. So they don’t have to increase their client base to make same revenue as before the SEBI’s TER cut as the “Asset Management Fee” component will not come down.

The reduction in TER is for the full MF industry (Manufacturers as well as distributors).

However, if fund houses are reducing the entire 15 BPs impact by reducing the commissions by full 15 BPS then it means that Only revenues of only their distribution partners are getting reduced and the fund houses themselves will be remaining aloof as there will not be any reduction under the head of “asset management” fee within TER.

This isn’t in the right spirit of partnership. It’s time for distributors to reduce their dependence on MF products for their income or partner only with fund houses that are “sensitive” to the distribution community & who shall take an equal hit.

Ideally the funds should absorb 50% of this cut of 15 BpS & pass on the remaining 50% cut to the distributors. That is fair.

So entire reduction in TER is passed on to us even on existing AUM. In direct they have reduced from their pocket which is one tenth of total AUM. But they have taken their entire loss and a lot more profit from us by passing the entire reduction on us. SEBI has helped them to garner a huge profits by letting them do so. IFA community is weak because there is no unity. Shame on all of us for allowing this to happen.

The most important thing in commission is that that AMC never increase commission of distributors when ter was increased but when Debi asked to decrease ter, with immediate effect they cut the trail on all current and existing AUM. This is absolutely unfair and unjustified decision of AMC. All the expense of direct MF is being recovered from regular plan and distributors.

This is one of the way to reduce the IFA's crowd. This is like giving a tasty ice cream at low price, decreasing the quantity and increasing the price further. U can't leave the industry, and stop doing this business.

I think all the IFAs around the country should stop putting any new business to all AMCs for next one month only.
AMCs, AMFI and SEBI have started believing that current business is coming due to them. Let them go out in the market and get the business on their own.

The reduction of trail commissions should have been proportionate to the TER. if the TER is 2% and the trail commisson is 1%, then as SEBI reduced the TER by 15 bps, the trail should had come down by 7.5% which would had been very fair to stakeholders.

Secondly, we always talk of technology and its belief that the usage of the technology will bring the costs down. its easier said then done. we are still far away from the fair usage of technology. just to share an insight, that CAMS should provide the capital gains statement under login rather then the mail back services. as the clients come to our offices and demand such statements to be given to them at earliest. even though the clients would receive the statements on email, they are not able to take the print of it and hence they again visit our offices for the same.

In India, we use PCs, but our PCs are not equipped with the printer, hence the solution of capital gains statement remains a half way solution with dual time consuming. I would humbly and with folded hands request the senior management of AMCs and CAMS to take a field survey on the usage of the computer by their unit holders, they will themselves understand that the usage of email varies a lot in pan india and the distributor had to bear the brunt of the same from the client.

i would request the AMCs and CAMS to ease the availability of imp reports, this can bring more business to MFs.

Then Mr. Nishant Patnaik what you have shared by the following link on 12th june 2018?
http://cafemutual.com/news/industry/13274-no-changes-in-expense-ratio-slab-sebi-mf-regulation

Can we know which AMCs reduce trail ?

Sell equity directly

This action of the AMCs is fully in line with their policy (jointly with AMFI and prodded by the government) to slowly eliminate the middlemen. Over the years, we have seen various actions harming the income of IFAs being implemented but the so-called experts always advise us to "increase the client base", "use technology" etc. and cite some examples of who have done. The end result is that the total income should not increase even after adding the clients as periodically they will keep implementing another retrogade measure.

I think the IFAs should seriously plan another source of livelihood and stop giving AMCs more biz as sooner or later, this income will stop.

Almost 1700 people I have discussed and motivated to invest in Mutual Fund to gain Maximum through out life to create maximum wealth for last 13 years. I used to go to people home and spent almost 12 hours every day for last 13 years . After educating investors for several years mostly investors are investing to MUTUAL funds in Direct Plan. I am getting zero(0) commission from my investors. Let AMC reduced commission to any extend I don't mind. Distributors/ M F D must stop to meet new investors. Never educate any investor . Direct Plan must be abolised.

IFAs are a set of unemployed, yet indulged in a dignified self employment section of Society. One can also describe them as an Unorganised sector of the Society. While all other sectors, including Ministers and Elected Members of Parliament and State Assemblies are very regular in getting incremental wages/salaries, this particular section has to always get satisfied with decremented Commissions at the instance Bureaucratic salaried dictatorial sections without even the shelter of an UMBRELLA to protect them. Sometimes It is absolutely necessary for the Prime Minister and Finance Minister of the country know the sad state of this so called supposedly untouchable Section, who are being ignored and treated like this.

Direct plan is bigger enemy than less trail commission. We must stop educating or approach new investors. Give service to most reliable investors. Finally investors have to suffer. AMCs /Amfi/ Sebi never ready to give you more commission because Population of India is 150 cr. AMCs need work from 2-4% population. Direct Plan Investors are increasing faster. Need to abolish direct Plan

Direct plans are going to be a harm to us. But it's harmful for people with improper knowledge and understanding. India is adopting the western/other countries distribution models of charging a fee for advisory and distribute it for free. It is reckless of AMCs doing this change. They have no idea that at worst and linear markets like 2018 these direct plan people are the first to get thrown out. Or switch AMCs. Execution of open ended schemes is going to be big pain to these fund houses. Where the trust of people will wave off from Mutual Funds and AMCs will have no intakes in a flat period. SEBI doesn't understand investment is not about numbers, it's about behavior and if there is no hand holding to Indian Investors they will not hesitate to bear loss and get outta this asset class. SEBI can't change the model overnight like abroad regulatories because the sense of investing of people there is way way way different then India. There is probably no analysis done before taking a wage step like this.
Anyway. The results in intake might be very high through online portals. But mind me. The slip of market will show it's colors.
Hail the Mutual Funds industry ahead. I don't like where this is going.

this is injustice to mutual fund distributors

fund houses revenue (fmc charges to cust) they not reduced

they not reduce salary to employees

the advisors away from generating new salws

sebi/amfi are not thinking on this way and

what happens in earlier while upfront is reduced

at present instead of 5 yr amfi certification is for 3 yr which increase burdon for training and renewal fee

upfront is lesser and now the trail is also letter

MUTUAL FUND BUSINESS KA GHANT BAJA DENGE YE SEBI/AMFI (GOVT DEPT)

AND

IT INCREASES UNEMPLOYMENT