In view of coronavirus pandemic, SEBI has allowed PMS players to continue to pay upfront commission to distributors till June 30, 2020. However, experts believe the move will not benefit distributors as HNIs are shunning PMS due to volatile markets and lockdown situation.
Jimmy Patel, MD & CEO, Quantum Mutual Fund says that many distributors have been facing difficulty in selling PMS to their clients due to lackluster performance of these products over the last three months.
Meanwhile, Nalin Moniz, CIO-Alternative Equity, Edelweiss AMC says that the flows in the PMS segment have dried up in the recent months. “This is because of the slowdown across businesses affecting risk appetite of investors in a risky product. Hence, the extension in the upfront commission will not have a material impact on distributor’s income,” he adds.
Delhi MFD Shobhit Gupta, co-founder of Moneygain attributes this to operational issues. He said, “Even if clients want to invest in PMS, they cannot do so due to operational difficulties such as opening a demat account, requirement of physical signature, notarizing the application form and so on. These issues cannot be addressed due to lockdown. ”