Online distribution platforms will boost direct plan sales but not impact advisors: U K Sinha

Semi current dicision impact the relations. In India people are very greedy they like to save money through direct invest weather

Sebi current dicision impact the relations of investors and distributors.
In India people are very greedy they like to save money through direct invementd whether self decision can create loss.but they are not ready to pay fee for valuable advice. ...In share trading people make loss and they exit in equity trading business. ..many not active demate accounts very good examples to us.

I really do not understand it. Showing direct NAVs in all communications to investors that means whoever is currently investing through IFAs. How does it not affect the business of IFAs because he said there are 2 different set of investors which is completely wrong and this is actually a malicious intention of sebi to benefit fund houses because right now they will keep the expenses low and get all the customers even our cutomers on board and then they will increase the expense which they will keep for themselves. The little commission given to IFAs is also pinching them. Also sinha expects first time investorsthat will be intelligent enough to

Sorry this is in continuation of the above post. Sinha says new investors should go direct meaning he expects new customers to be more intelligent than IFAs who can guide them. What direct investors do is they go on moneycontrol and valuereaearch website. See the star rating of a fund and start investing. Mr.sinha is this what you want? Also will they understand what is due diligence, goal setting and which fund suits their goals? Will they know which fund is better in quality rather than just looking at the returns? This is ridiculous.

Thank YOU Mr. Sinha, you are the most intelligent personality in this World. You not only hitting the IFAs stomach, indirectly so many families. I am a believer of KARMA.

Mutual funds Distribution business is waste of time now a days. There is no future in selling Mutual funds. Let's take my example. I am a new ARN holder. See my journey as an MF Distributor.

1...First clear the NISM exam by paying 1700/- then appeared in exam by travelling 100km (Spend 800? ). Then paid 2000? to AMFI. Total expenditure 4500/- Now I am ready to sell MFs ????. No..No..

2. Now I have to empanel my self in all different AMC ( What the foolishness). What they don't empanel me in auto mode . I went all the AMCs individually whose offices are spread at different places.

3. For empanelling in few AMCs I have to send forms by Courier.

Now comes selling Mutual funds.

I started with Lump sums and SIPs.

In lump sum when client got folios , same time he received the mail from AMC for registering himself online and transact online.
Then my investors came to know about Regular and Direct mode.And after some time I came to know that 50% of my business went in direct mode.


Now listen the story of SIPs .., here The same SIP started and client received mail for. On line and got some awareness from newspapers They are also planning to switch to direct mode as some WEALTHEE app is promoting direct mode...

Till now I have not earned anything from distributing MFs. Only wasted my time in educating peoples for investing in MFs.

What does SEBI/AMC think themselves. We distributors educates investors about financial market and MFs , and then these SEBI/AMC tell them to go Direct.

There should be a ruling that and investor who is going in Regular mode cannot go in direct mode at least for three years......

The SEBI chief has been doing double talk since quite some time. On one hand he is destroying the IFA distribution channels and seemingly empowering the investors. In a country where the retail mf distribution is less than 10% and investors do not have sufficient gyan nor the time to manage their mf investments in the long run.The effort of SEBI should have been inclusive growth of the industry i.e the technology should be an enabler and not a disabler for one of the stakeholders i.e. the IFA community. In the long run it will negatively hit the investors.

one query in my mind
Who is given to knowledge about mutual fund to the client?
we are ARN holders then why direct plan incash it?
Also they have advertise separately and also introduce separately direct plan and launch only direct plan not.

Sebi chief wants IFA should stop business & those who spread MF EDUCATION IN LAST 10 YEARS should now take rest and new generation is smart enough to invest on there own , entry for new IFA is a loss making business

There is a silver lining to all this commission disclosure thing.

First reduced competition as many marginal advisors will leave business and more than that very few new advisors joining the industry.

When a young graduate or post graduate MBA etc can get minimum Rs 4 lacs starting package in banks and other big companies then why he/she will join mutual fund distribution or RIA business

1) No certainty of client business
2) Business takes time to build up - almost 3-4 years of out of pocket expenses. I'm new to this business and I for sure know how I'm just paying expenses and surviving. If I start focusing on insurance then maybe I can get enough clients upfront to pay for living expenses. So people are joining insurance industry because of good commissions, good policies and above all a favorable regulator.
3) Fear of direct plan will keep those people away who take up advisory on basis of few big clients or relatives.
4) If young advisors fail in MF distribution or RIA, then will be even more harder for them to find lucrative jobs.
5) People mindset is not to pay for advice which they get free from every source - news, online, papers etc. Till the time people understand value of advise, they are already over 45, a large part of their wealth building lives get over. So RIA model is doomed and only distribution is successful for financial literacy and wealth creation for both client and advisor. SEBI is thinking of Mumbai to be entire India and India to be like Canada / UK / US, which is not true.

Moreover, clients who are with banks and getting mf sold by tellers and clerks will come to us when they start valuing proper financial advise.

We just need to pass the turbulent times and hold on to clients like family.

My 2 paise: Personal Finance Management is more about managing the person's financial behaviour than about crunching numbers. Most retail investors are unable to manage their financial behaviour very well and end up making mistakes (even we do in our own finances, in spite of being professionals).

Even in Direct plans, they need to pay for advice from a fee based advisor. Simply going to fund rating websites or learning about personal finance concepts online can only take one so far. Even if one does become a prolific money manager, other family members may not. So what happens when the investor is too busy / no more / physically/mentally constrained?

Having a professional(distributor/RIA) to help the investor and his/her family through the ups and downs of life is more important than a few basis points of costs. However, many new investors will realise this only after making mistakes. Some will never realise it all.

But does any of this affect our future prospects negatively? I don't think so. If we are evloving and providing value to our clients, we will only have more and better clients to manage.

10 years from now, we may see that robo advisors with direct plans may be the solution for smaller investors to begin with. When they achieve the size to be able to afford a financial planner/advisor, our premium services will be availalble to them. Having a qualified, profesional advisor will be an aspiration for our prospective clients and a point of proud satisfaction for existing ones!

Would love to know your thoughts on the same...

Through various poorly thought through initiatives Mr Sinha seems to be on a mission to destroy the mutual fund distribution business, and eliminate this category altogether. What he is forgetting is that there are very similar products out in the market like ULIPS which are sold by 30 lac insurance agents, where none of these stringent rules apply. If you really want to protect the investors' interests Mr Sinha, you should ensure a level playing field for all financial products. Lets see if you can make insurance plans zero commission, or disclose commission earned on all insurance policies to be highlighted in the policy document! Now that would be interesting, I challenge you to do that.

SEBI'S not behaving like a regulator.They must realize how many people of Bihar are ready to pay advisory fees.Many MBA investors stopped SIP due to Rs.100/ above 12k investment.I have to take back that option.

Yes i strongly feel mf distribution business thru ifa is crap and shud be diverted thru clean direct mode. Only then i will make commission thru direct crores every mnth happy selling uk sinha retiring in mar 2017 tab tak toh kama le