PFRDA has allowed retirement advisors (RAs) to charge a consultancy fee of 0.02% of AUM from NPS subscribers. This fee ranges between Rs.100 and Rs.1000.
In addition, RAs can charge an onboarding fee of up to Rs. 120 per subscriber registration. They 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.
In a circular, PFRDA has clarified that RAs will have to enter into an agreement with their clients for charging advisory fee. Also, RAs are required to disclose lower and upper limit of the advisory fees i.e. Rs. 100 to Rs. 1,000 in such agreements.
Further, PFRDA said, “The scope of such advice being provided by the retirement advisers in any manner, either oral or in writing to the subscribers will be limited to asset allocation.”
PFRDA has allowed IFAs to distribute NPS by registering themselves as retirement advisers with the pension fund regulator. To distribute NPS, IFAs need to obtain a passing certification from NISM and apply for the retirement adviser license with the PFRDA.
