MF News Meet IFAs-cum-retirement advisors

Meet IFAs-cum-retirement advisors

PFRDA’s initiative finds very few takers with only 12 retirement advisors across the country.
Rosevina Gonsalves May 15, 2017

Introduced in June 2016, there are only 12 retirement advisors (RAs) across the country. To distribute NPS, IFAs need to obtain a passing certification from NISM and apply for the retirement adviser license with the PFRDA. We spoke to a few IFAs to understand what inspired them to retirement advisory.

Delhi-based Prashant Mudgil of Intellectual Financial Planning and Advisory is a CFP and currently the only retirement advisor in country’s capital. He believes, “Becoming an RA helped me establish credibility. NPS is a government-backed product and people have an inherent faith in it. So far, I have sold NPS to 15 clients.” Mudgil manages AUM of Rs.250 crore in mutual funds.

Pune-based Navin Choudhary, a registered investment advisor (RIA) and alumnus of the Indian Institute of Management, Calcutta, took up retirement advisory on the suggestion of a SEBI official. He says, “I deal with investment products ranging from mutual funds to PMS. I added NPS to expand my offerings. Retirement products like NPS are cost effective and could deliver higher risk adjusted returns compared to debt oriented pension funds.”

Jayprakash Yadav, a BSC graduate from Goa registered himself as a retirement advisor in order to expand his distribution business. He thinks, “In the long term, NPS can outperform other retirement products considering its low expense ratio and high exposure to equity.”

Yadav faced difficulty in getting user id and password from PFRDA to use the NPS platform. Sharing his experience, he said, “Although I registered as a retirement advisor 8 months ago, I am yet to receive user id and password to use NPS CRM platform. The registration procedure is sluggish and lacks active interest from the regulator.”

Most of the RAs to whom Cafemutual spoke to face a similar problem. To resolve this issue, PFRDA has introduced an online registration system for RAs recently.

Speaking about the initiatives of the pension fund regulator to attract retirement advisors, BS Bhandari, whole time member, PFRDA said, “Although many people appeared for NISM’s retirement adviser module, only a few have become retirement advisors. In fact, we have asked NISM and FPSB to encourage professionals to become retirement advisors. Advisors can cross-sell NPS to their existing clients. Intermediaries registered with SEBI and IRDAI can consider adding NPS to their offerings to grow business.”

By becoming RAs, IFAs can charge a consultancy fee of 0.02% of AUM from NPS subscribers not exceeding Rs. 1000. In addition, RAs can charge an on-boarding fee of up to Rs.120 per subscriber registration. RAs can also charge a fee on other services like Rs.20 for each transaction or Rs.100 annually. These charges have to be recovered directly from investors.


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