With the reduction in TER, many fund houses have reduced trail commission to the extent of 15 to 20 bps.
A Mumbai-based distributor told Cafemutual that all the large AMCs have reduced trail commission on old and existing assets by 15 bps and in a few instances even 20 bps, he said.
While we were able to receive confirmation email from eight fund houses on reduction of trail commission, we understand all fund houses have either reduced such commissions or are in a process of doing so.
Earlier, SEBI has incorporated changes to the additional expenses that fund houses charge for B30 expansion and exit loads. While the regulator has revised the definition of top cities and beyond top cities for additional TER, it has reduced expenses charged in lieu of exit to 0.05%. Both these changes has led to reduction in overall TER.
Srikanth Meenakshi, Founder and COO, Fundsindia.com told Cafemutual that most AMCs have reduced trail commission to the extent of 15 bps. “This has been added to the list of pain of the mutual fund distributors. However, distributors should focus either on increasing business from existing clients or on boarding new customers. And technology can come in handy for distributors to reduce cost and service large number of clients,” he recommended.