We are not here to abolish distributors: SEBI

Oh that is news! Thought SEBI stood for Systematic Elimination Of Brokers and
Intermediaries!!!

In Indian context,for selling mutual funds, personalised approach of distributor is only required, simply giving advise on investors risk appetite, and financial capacity will not enhance investors knowledge, it is again a fee based, Indian retail customers prefers to remain with distributors. SEBI should not try to divide between IFA, & distributors,.Let investors decide, which way they need.

Respected SEBI Members, Why the rule of fee brokerage of distributors is changing? is it necessary? in 2007 Upfront stopped Now the New rule may be taking fee from investors is the all investors pay? is it going to be successful? in india very low awareness. Those who earn in business is hard to get business. instead this rule to forced to banks who are selling MF and Ins. without knowing investor age time horizon income and need. One of our local bank is selling midcap and small funds whose age 50 plus. is it right? assert allocation is needed.

Thumb rule is skip the No/ Not im the headline n then read it.
So SEBI clearly saying... WE ARE HERE TO ABOLISH DISTRIBUTORS.
Take the message n align yourself.

I am really impressed by these statements. Time is not very far, due to the projected confusion, Trial and Error method of Implementation, Plus GST of 18% levied on the MF Distibution, they will DIE Natural Death ..!! Leaving no reason to Abolish ..!!
The small Distributor's and Investor's Welfare goes for a TOSS .. Maybe that is the time, when the Regulators, Mega Distributors and Of course OUR BANKS, will all celebrate,
as they never had to ABOLISH ..!!

Hear AMCs and AMFI,

Mr Mahalingam's message is for you as an alarm and less a threat to Distributors. Spend more on expanding your presence pan India or perish. RIA, by its definition can complete the advisory , make a prospective investor to investor. But lot of other things to complete the investment process. Get ready with human resource for yourselves.

Right now, every AMC is enjoying the services of distributors, who are the cheapest human resource available for bringing in the business.

Mr. SEBI whole time member, a marginalised (disrespected) is also distributor for many non MF financial products where still he/she is not marginalised (disrespected). Sky is the limit for us to earn a respectable living.

Have you ever heard - where service provider is made to pay service tax/ GST out of their hard earned money. IT IS HAPPENING HERE IN MFINDUSTRY.

Let AMC gentlemen reach beyond metros and T15 cities by compromising their air travel and 5 star comfort to know how distributor community is an absolute necessity for their penetration.

Stop thinking of marginalising us. Is the industry is ready to see we are eliminated.

Mr Sebi Member;
Rather than pushing the distributors to become RIAs, why not ask the investors to sign a disclosure that they "understand the meaning of fiduciary and are ok to opt for regular plans from our distributor"? Make this exercise a necessity. I agree that it's cumbersome but it's less cumbersome than what is currently being proposed to make everyone RIAs.

Also, why has there not been any rule on making AMCs RMs selling direct plans as RIAs?

Haha.....this is a joke of the year. Liar, liar, liar. What a contradicting statement...first he says he doesn't want to abolish distributors but wants people to come through RIAs both in the same line. But you are making our lives miserably difficult so we have to become RIAs or perish. And what about investors? They have to pay fees and that is how products become more expensive. The biggest winner is Manufacturer because no commission to be negotiated with us so full expense ratio to be kept to themselves which anytime in future will increase for sure. Also mutual funds selling directly will not have RIAs in between then the purpose is not solved. Also in the office of AMCs and AMC's sales people selling their products outside will be RIAs? Why to allow them? Infact banks and brokers should be banned from selling mutual funds at all because they are the biggest missellers. All if this at the expense of investors. Was SEBI formed to benefit and safeguard investors or benefitting and safeguarding the companies is the biggest question.

Most confusing statement...... telling something & doing something different.......

Sir. I am working as a IFA. My experience is if we meet 10 people and explain the features of SIP and mutual funds one or two persons will show interest. We are working g to behalf of clinets welfare and working as his financial advisors and we are not charging any fee. Because we want to build the confidence to them to invest in MF. But these regulations and GST may be smash our all efforts and IFA will be in trouble. Kindly protect IFA and let them to serve for their cliants with this small portion of the brokerage. Thank you.

If anybody have the email ID of Mr.Mahalingam then please share with me as I want to bring to his kind notice that How AMFI is treating Distributor. An instance case is that I had submitted a fresh mutual fund application from one of my investor who was fan of Morilal Oswal MF in a good faith that I will be registered as distributor as I am holding ARN(authorised license), However Motilal Oswal rejected my application for empanelement as distributors for the reason that they have stop empaneling new distributor for the reason they don't required further distributor. I astonished to read the reply & take up the matter with board of AMFI who had kept silent on the issue & acted like crocodile. I believe whole system is wrong as it happens like that the motor licence holder being forbidden to drive on the road. It has compelled me to believe that India embracesing.

Basic idea of RIA is to stop malpractices, in Mf industry.Where there is already an option to invest through advisor or distributor.Just like one can take a pill directly through a medical shop without consulting a doctor.On one hand amfi is issuing arn card to advisor and on the other hand sebi is considering him as a distributor.My question is whether a ARN holder is a advisor or only a distributor ? his role should be exactly be specified.If sebi is really serious on this issue it should try to cut the frill's in distribution business i.e put a ceiling on unnessary nfo's, the schemes which are not performing well should be merged with consistent performers. One of the ways to curb malpractices is to keep uniform upfront and trail brokerage in all the schemes belonging to a particular category of funds, so that advisor can a unbiased suggestion to his client.

Sebi start is laughing at MFD.

sebi is clearly taking steps which makes ifa s impossible to do business
it thinks all distributors are doing wrong advise
banks are the biggest mis sellers of financial products person wanting to make an fixed deposit they sell ULIP or MUTUAL FUND product
fund house representative at AMFI should take aggressive protest against sebi moves

I agree with views expressed by Prashant and M Srinivas about this subject.

We have to file RTI against GST for MFD individually and make the stake clear and fight against it to make our stake against SEBI

I agree with most of the comments above. In addition I think the following points also need consideration :
1. Fiduciary declaration of commissions should apply to all financial products uniformly. This includes traditional life insurance plans too (why only ULIPS?) and general insurance products as well as Fixed Deposit and other schemes. Infact why should they not apply to other non-financial products as well? Isn’t there a fiduciary duty for a hospital or an architect etc.? Is there a body to prevent these entities from mis-selling?
2. Mis-selling is assumed to be done by mutual fund distributors alone. What about traditional insurance plans which are sold as products with “guaranteed” returns?
3. Banks and AMCs (specially group companies of the banks) too have a greater fiduciary duty as they have access to the client’s financial data but are not answerable for the products they thrust upon them. Especially when the client is at the mercy of the bank when he/she takes a home loan /education loan /overdraft facility for business.
4. What does SEBI do about listed or even other companies openly flouting rules? Why does it always wake up after it’s too late like in the case of companies like Sahara or PAN Card Clubs? In the latter case, isn’t the name itself misleading and objectionable?
5. Large national distributors of mutual funds bargain with AMCs for higher commissions or other remunerations/facilities and promote only those AMCs. What does SEBI do about this?
6. Why is there no uniformity in the rules of and documents required by, all AMCs for change of bank / transmission / change of status from minor to major etc.? Why does AMFI or SEBI not help the investor here?
7. What have the regulators done to genuinely educate the investors in a country lacking financial literacy? There are still so many people who do not know what is a Term Plan or an Accident Cover policy let alone its importance.
8. Lastly, how is the government justified in charging GST on distributors’ commissions? GST is an indirect tax which is to be borne by the ultimate consumer of the goods or services. How is the distributor supposed to recover this from the ultimate consumer who is the investor?

The atmosphere all around seems to be for authorities to say one thing and then do exactly the opposite. Even SEBI is following this principle. No one believes them as their actions speak louder than their words. Common man and the small distributors have been facing bad times since last 3 years.

First Service Tax, then it was removed; now again GST plus Income Tax making a mockery of less than Rs.20 lacs rule. Finally there will nothing left to take away from.

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1. I fully agree with Mr. S. sivsankaran
There is rampant miss-selling of MF and insurance products through banking channels.
In majority of cases , they just donot bother about clients interests and true needs. They are not bothered also to make client aware and educate in true sense ,to help him take most appropriate decision, with regards to his capacity, and his requirements.
In many such cases ,clients have been found lamenting,when they come to know of correct picture, which happens at avery later stage
2. I also fully support point no 6 of Anuradha Dalvi,
Regulators need to focus on this issue and streamline and uniformlise the rquirements in all these cases, to reduce the hassles faced by clients and distributors.

1. I fully agree with Mr. S. sivsankaran
There is rampant miss-selling of MF and insurance products through banking channels.
In majority of cases , they just donot bother about clients interests and true needs. They are not bothered also to make client aware and educate in true sense ,to help him take most appropriate decision, with regards to his capacity, and his requirements.
In many such cases ,clients have been found lamenting,when they come to know of correct picture, which happens at avery later stage
2. I also fully support point no 6 of Anuradha Dalvi,
Regulators need to focus on this issue and streamline and uniformlise the rquirements in all these cases, to reduce the hassles faced by clients and distributors.

Ggg

Let the regulator understand that IFA's are the back bone of this MF business,.which is PUSH product,. why break it in a phased manner,. whatever the industry is boosting of 20 lakhs crores of AUM 's is only a pea nut,. Let the IFA's be empowered by the system and see where the AUM 's can reach , can boost the economy and bring more and more business opportunities to AMC's and IFA's. In India Equity penetration is hardly 4 to 5% if you want it to be reaching 30 to 40% you need DISTRIBUTORS/ IFA's who are evolved. We have been hit on the legs every now and then and asked to run. With so much of pain the AUM's have reached 2O lakh crore,. Malaam lagake, haath pakadake dhekho,. kya hoga! You just can't imagine. Dear regulator haath pakadke dekho, haath dikhake nahi!.

There is a mis conception about distributor and advisor. Individual Advisor and Individual distributor are same. They can not be saperated. Since last many year IFA - Individual advisor cum distributor are seving mutual fund industries with proper guidence to investors. They are spreading benefits of mutual fund to the investors. They are serving and motivating investors for best possible output. Mutual Fund industries growth with Good AMC and Good Funds AUM growth are best examples for IFA advise & services quality.
Every Individual Advisor are try to develop his career in Mutual Fund Industries So he has to become well wisher of Investors. Mutual Fund industries revenue are trail model that it self maintain discipline long term investment that is win win situation for investors and IFA - ADVISOR CUM DISTRIBUTOR. Actually There is no any conflict but good harmany in advisor cum distributor.

Practically it is very difficult and harmfull to saperate Advisor and Distributor for Investors. Intially investor invest small amt or tested amt with trust and facevalue of IFA then gradually service and approached are create small mutual fund investor ( Upto 1-2 Lacks ) become HNI Mutual fund INvestor (above 3-5 Lakhs).

So here there is gradual process to convest mutual fund initial investor become mutual fund lover investors. Mutual Fund is a best product for Long Term as well as Short Term Investment. We can play asset allocation in mutual fund products. SEBI should control AMC & Fund Management Process. IF underline manufacture products are perfect and good then Investor will gain maximum through investments.

There is a mis conception about distributor and advisor. Individual Advisor and Individual distributor are same. They can not be saperated. Since last many year IFA - Individual advisor cum distributor are seving mutual fund industries with proper guidence to investors. They are spreading benefits of mutual fund to the investors. They are serving and motivating investors for best possible output. Mutual Fund industries growth with Good AMC and Good Funds AUM growth are best examples for IFA advise & services quality.
Every Individual Advisor are try to develop his career in Mutual Fund Industries So he has to become well wisher of Investors. Mutual Fund industries revenue are trail model that it self maintain discipline long term investment that is win win situation for investors and IFA - ADVISOR CUM DISTRIBUTOR. Actually There is no any conflict but good harmany in advisor cum distributor.

Practically it is very difficult and harmfull to saperate Advisor and Distributor for Investors. Intially investor invest small amt or tested amt with trust and facevalue of IFA then gradually service and approached are create small mutual fund investor ( Upto 1-2 Lacks ) become HNI Mutual fund INvestor (above 3-5 Lakhs).

So here there is gradual process to convest mutual fund initial investor become mutual fund lover investors. Mutual Fund is a best product for Long Term as well as Short Term Investment. We can play asset allocation in mutual fund products. SEBI should control AMC & Fund Management Process. IF underline manufacture products are perfect and good then Investor will gain maximum through investments.