The industry body says distributors need to organise themselves into an association to put their views across
Mumbai: AMFI wants mutual fund distributors to organize themselves into a national association with state-level chapters. The purpose of bringing distributors on a common platform is to ensure they become part of the process that leads to decision-making on policy issues.
H N Sinor, Chief Executive, AMFI, in an interview with Cafemutual, suggested that distributors can create state-level bodies and have an apex body at the national level.
“Yes they should create their own body. The apex body can be in touch with AMFI on a quarterly basis to flag various issues. Distributors are spread across India. AMFI can’t talk to 50,000 people at a time. We will be too happy to raise distributor issues with regulators or whichever way it is required to be done,” said Sinor.
Ever since the abolition of entry load from August 1, 2009, distributors have been complaining that their views are not taken into consideration before any major policy decision.
“I appreciate this action from AMFI because we don’t have a representative body. It is a little too late because a lot of big actions by the regulator have already happened without hearing the IFAs,” said a distributor from Mumbai, who has more than Rs 300 crore of assets under advisory.
The fast-paced regulatory changes have made the advisor community to come closer and brainstorm on how to go about tackling regulatory changes. Many informal and formal associations have already been formed with different agendas.
The IFA Galaxy Association is one such group formed for knowledge sharing. The man behind this group is Ramesh Bhat, who owns Aniram, a financial advisory firm in Chennai.
Mumbai has some four or five such distributor groups. Kolkata has two to three IFA groups.
“The mutual fund sector is unorganized. It is better to have more associations so that they can enlighten each other and also talk to the regulator,” said a Mumbai-based financial planner.
An association of IFAs called Delhi Financial Advisors' Association (DFDA) too has been formed. This is the largest association of financial advisors in North India.
Currently the distribution community is grappling with a dent in their revenues as not all IFAs are able to charge a fee from their clients following the ban on entry load. The trade body is also looking at addressing the incentive structure of distributors.
