SEBI Chief U K Sinha acknowledged the role played by IFAs in the growth of the MF industry. In a recent interview with Value Research, Sinha was quoted, “I do believe that IFAs have played an important role in the growth of the industry.”
While he commended the effort of IFAs, he said that they need to change with time, perhaps referring to the need to adopt a fiduciary role by becoming RIA. “But I think they need to change with time. Perhaps this change has not happened. The writing on the wall is very clear,” Sinha was quoted in the Value Research Mutual Fund Insight magazine.
Speaking about the variation in the expense ratios of direct plans across fund houses, Sinha said that the regulator is studying the situation and will intervene if required.
To a question whether the B15 expense structure is permanent, he said SEBI will not relook at the B15 incentive at this juncture. “Almost 35% of retail AUM is now from B15 cities. When this scheme was introduced, the share of B15 was hardly 15%,” said Sinha.
Sinha also said that he is not worried about the increasing concentration in the industry. He said that his worry is that the bottom ten players have less than 1% AUM. “How many AMCs are there is not important. The important thing is that how easy it is for an investor to reach out to an AMC of his choice,” said Sinha.
