MF News Distributors play a key role in increasing MF penetration: SEBI

Distributors play a key role in increasing MF penetration: SEBI

SEBI has also asked AMFI and fund houses to promote direct plan among investors.

Nishant Patnaik Dec 20, 2018

Acknowledging the role of distributors in the growth of mutual funds in India, SV Muralidhar Rao, Executive Director, SEBI said that distributors are playing an important role in increasing the penetration of mutual funds in the country. He was speaking at the CII Mutual Fund Summit held recently in Mumbai.

Rao said that the industry has ample scope of mobilizing assets through distributors. It is recognised fact that growth in B30 penetration is due to distributors, he said. He further said that geographical diversification of mutual funds is one of the key objectives of SEBI.

Rao has also asked AMFI and fund houses to promote direct plans among investors. He said that direct plans are more cost effective, transparent and less prone to mis-selling. Sharing some interesting data, Rao said that the direct equity AUM accounts for 22% of the total equity AUM.

He further said that the industry needs to promote passive funds such as ETFs. Currently, ETFs account for 4% of the total industry AUM. In US, ETFs account for 15% of mutual fund industry assets, he said.

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53 Comments

Amit Kumar Das · 5 years ago `

Let the IFA bring in the first-time investor, then AMFI will promote direct plans to him.

rajesh bhardwaj · 5 years ago

very right , we educate the new investors about mutual fund and amfi and amc educate the those investors direct plan

Abhishek dubey · 5 years ago

I think sebi and amfi have decided that in future Ignore distributors .In recent sebi activity it clearly indicates.

RAKESH CHATURVEDI · 5 years ago

VERY UNFORTUNATE, MFS ARE VERY COST EFFECTIVE TO INVESTORS BUT SEBI IS INDIRECTLY PROMOTING ULIPS WITH LOT OF CHARGES, BECAUSE IF SOMONE SELLING ULIP ADVISOR WILL GET 6-15% INCENTIVE & SELLING MF WILL GET 0.

ROHIT SUTHAR · 5 years ago `

AFTER STOP UP FRONT COMMISSION, EARNING COME DOWN AROUND 30-40%.
COSTING TO SELL MF SCHEMES LIKE- STAFF SALARY, FUEL EXP. OFFICE EXP. ETC ARE NOT POSSIBLE TO MANAGE. MOSTLY NOW SMALL IFA ARE NOT INTERESTED TO DO MF BUSINESS. THEY ARE LOOKING TO SUBSTITUTE PRODUCTS. COULD ANYONE TELL ME THAT WITHOUT SALARY, GOVT. EMPLOYEES GIVE SERVICES ? IF DISTRIBUTORS ARE IN ROLE OF MF GROWTH, THEN WANT INCOME TO WORK. BECAUSE THEY HAVE A FAMILY AND LIFE RESPONSIBLITY,

Mukeshwar Malhotra · 5 years ago

great

SANDEEP DAS · 5 years ago

ITS TRUE...

Snehasish sanyal · 5 years ago

until and unless there is no income it has become difficult for us to run the family and many of the distributors are already shifted their focus to different fields.

Himanshu Deshmukh · 5 years ago `

Sebi making fun of IFAs.
Bring level playing field in all financial products.

Hrudayesh Patil · 5 years ago

Correct

Anil Ganpat Salvi · 5 years ago `

In case of direct plans, it is not about misspelling, but mis-buying. Buying the wrong product without understand the risk profile, experience, time horizon.

RAM PRAVESH MAURYA · 5 years ago `

Sebi not different between chess & ifa

Raman Jha · 5 years ago `

Let's focused on insurance

Abhishek dubey · 5 years ago `

Sebi and amfi activity clearly indicate distributor look for other business your future is not secured in Mutual fund industry don't waste your time other wise you introduce client and we will sell them direct plan...This will make fun..

Sureshkumar · 5 years ago `

This has become quiet famous to pacify IFAs. On one hand they praise IFAs and on the other hand they try to vanish IFAs through their acts. They have opted devide aand rule also. Like splitting into IFA and RIA etc.,

S.VENKATRAMAN · 5 years ago `

In recent correction we have seen many direct investors have redeemed and missed the opportunity. Market again bounce backed. There was one to educate the google investors. Some have lost money during redemption and they propagate to others that stock market and mutual fund are GAMBLING.
Is this SEBI want?

S v rao · 5 years ago `

Yes since IFA penetration is high n they were minting money on royalty basis it's needed to promote direct plans n cut on commission. This will benefit Sebi clients insurance industry n all its a one solution for all happy Ifa get out from mf

S v rao · 5 years ago `

Manish · 5 years ago `

Mr. Rao if IFAs are doing everything wrong then this whole mf industry can't able to make it reach the trillions number since inception. It's IFA whose hard working make mf industry reached new heights.
Your irrelevant comments are misguiding investors and irritating the IFAs.
Jara TOL MOL KE BOL.

Ashish vyas · 5 years ago `

MUTUAL Fund sahi nahi hai.......For IFA

Ashish vyas · 5 years ago `

MUTUAL Fund sahi nahi hai.......For IFA

Bajrangi Chaubey · 5 years ago `

That's why sebi is doing wrong with diatributors to ruin mf industries.

Arvind Thakur · 5 years ago `

trying to make a new story. cant believe on these words. it is surprise. it is like a fun.

DEVESH ARVIND SURATKAR · 5 years ago `

Now SEBI realize about distributor. Mr saberwal fund manager managing JM core11 fund I have seen Baroda base company taking stock at very high prices in his portfolio for offering core of Rupees spoke by the director of company to me. Today that director in jail for default loans and this company dilisted. Every body knowing what happened that fund. But fund manager still in industry and getting five times more package. SEBI director no action see the truth. Now they behind whom those built the empire of mutual funds business.Dipak parekh not knowing see the style. I am sure that SEBI also tested the honey. That's why not action made. In today's model if I generated one thousand sip I am getting 8Rs on monthly basis. Where petrol used 60 Rs. But the SEBI uder graduate director does not knowing reality. Why they not getting daily wages. If the rules made for Distributors then made for Fund managers and all related employees.They consider only few distributor. I don't know the appointment of SEBI director as I want to know the process. The dectectorship will hampers the carrier of Distributor and growth engine of nation on question. This will affect to lose power of PM. As finance ministry is running on chamcha. Fingers crossed only small changes lose the empire. This is a alarm but I know dectectorship will not listen. But surely will pay big cost for that and Papu will run country. Sorry wrote the the truth and facts. Apologies for the same. Truth can't wait.

Vishal · 5 years ago

Well Said ..........Only IFA's income r seen rest is all OK for SEBI !

tirtha deb sarkar · 5 years ago `

Direct business is possible only for metro city but in rural sectoror small town its impossible to promote mf business. How much business come from rural area? SEBI has no idea of IFA`s contribution on market.

Vishal Rastogi · 5 years ago `

Why they r neglecting the People who make them stand today , Its mistery to understand. If they really bother to improve they quality sell of MF just stop ND's & Bank to sell it because 80% of mis-selling is done their. If anyone wants to test it plz. come to me I will show how they r fooling the inocent citizens !

Divyeshbhai J. Makani · 5 years ago

Very True

Kumar Vikram · 5 years ago `

Searching client motivating them to invest and when we create an investor SEBI & AMC jumps in and asking for direct promotion. ???? ???? ????????? ?????????? ??? ?? ??? ?? ?? ?? ?????????? ?? ?? ??? ????????? ????

Dinesh Kumar · 5 years ago `

If SEBI is so concerned about misselling and promoting direct plans. Why don't SEBI ask AMC to sell direct plan with different name. Why should they have a same plan with different pricing. We educate the client, We do the hard work and they are pigi riding on us.

Abhishek Kale · 5 years ago

Can SEBI come up with a rule which says that an investor who invested via an IFA in a particular scheme, will not be allowed to invest in the direct plan of the same scheme for x number of years. And also the investor will have to pay a one time fee to the IFA in case they would like this x number of years clause to be removed. This is like no compete clause. Also the fund house should not be marketing their direct plans to the customers who are invested in their schemes via a distributor. Promotions if any should include the IFA distributor through whom the investment was made by the investor. Both SEBI and AMC should acknowledge that it was the IFA who introduced the investor to the fund house.

Rama kanta dhar · 5 years ago `

He is saying both. One way he says distributors plays a vital role for penetration. Other way he wants to promote direct schemes.

Biswajit · 5 years ago `

Without IFA growth of AMC stopped.Some one always speak of direct plan because of save 1% commission but in reality they lose return 3 to 5% lack of awareness

Biswajit · 5 years ago `

Without IFA growth of AMC stopped.Some one always speak of direct plan because of save 1% commission but in reality they lose return 3 to 5% lack of awareness

pRAVIN sINGH · 5 years ago `

Sebi and amfi activity clearly indicate distributor look for other business. Mutual fund business develop by IFA , now SEBI and AMFI wanted to remove IFA from mutual fund Business and promoting Mutual Fund in Direct Plan

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