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  • MF News ‘Investors will notice that direct plans are cheaper but good advice will triumph’

    ‘Investors will notice that direct plans are cheaper but good advice will triumph’

    In an opinion poll recently run by Cafemutual, 50% of IFAs believe that they can convince clients of the value of their advice.
    Team Cafemutual Dec 31, 2018

    Most financial advisors agree that their clients will notice that direct plans have become cheaper. However, they share a strong conviction that they can make their clients realise the value of their advice.

    ‘Difference between the regular and direct plan has increased. What would be its impact?’ asked a poll run on Cafemutual.com

    Close to 3500 IFAs participated in the opinion poll featuring on our website. Of these IFAs, 50% or 1732 IFAs feel that they can convince their clients that their advice holds value.

    However, 1328 IFAs or 38% of the total respondents believe that investors will find direct plans more attractive.

    Just 394 or 11% distributors feel that Investors will not notice the difference in expense ratio between the two plans.

    Here is the snapshot of the opinion poll result.

    What would be the impact of ban on upfront commission and shift to all trail model on your business?

    Investors will notice the difference but I will be able to convince them : 1732 votes, 50%

    Investors will find Direct plans more attractive: 1328 votes, 38%

    Investors will not notice the difference : 394 votes, 11%

    Total 3,454  votes

    Have a query or a doubt?
    Need a clarification or more information on an issue?
    Cafemutual welcomes all mutual fund and insurance related questions. So write in to us at newsdesk@cafemutual.com

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    Disclaimer: Cafemutual is an industry platform of mutual fund professionals. Our visitors are requested to maintain the decorum of the platform when expressing their thoughts and commenting on articles. Viewers are advised to refrain from making defamatory allegations against individuals. Those making abusive language or defamatory allegations will be blocked from accessing the web site.
    4 Comments
    R C Gupta · 5 years ago `
    am amazed by your survey and views..........investors will notice direct plans

    "only 21% investor apart from top 20 cities in india invest in MF and they will notice expense ratio".....WOW....heights of idiocy

    79% AUM coming from top 20 cities......

    Who will approach investors from tier 2 ,tier 3 and rural areas.....SEBI/AMFI thinks advertisement will

    These guys inside good AC offices dont know the requirement at grassroot level

    CAFEMUTUAL TEAM....COME OUT OF YOUR AC ROOMS.....select towns, cities, villages ......do nation wide survey on preference of investors for MF.....you will get real results

    For your info they dont want to invest in MF......FORGET ABOUT DIRECT ,REGULAR PLAN......THEY ARE NOT CONCERNED FOR IT AT ALL

    India need distribution network.....to reach out these investors.....educate them counsel them.....do followups.....and with such poor incentives do you think any distributors....IFA, NBFC, Banks will do it?

    A Kumar · 5 years ago
    Very True....these guys are equally behaving like bureaucracy........official just sitting in a room and decide the carrier of numerous people.

    Mutual fund is not a demanding product......it takes lot of effort and numbers of follow up then the investor convince....also if the investor decide to redeem money with in stipulated time then distributor face clawback too....so who will compensate the follow ups...counselling energy.....counselling time....and the expertise.


    do..Surveys.....
    Reply
    MURARI · 5 years ago `
    After throwing the distributors out of business, all these soothe saying is coming up. The biggest culprit is AMFI who despite having a united front did not have the courage or convincing capacity to convince SEBI. They are only bothered about themselves. All the distributors should let the Fund Houses to service the clients directly. Then they would know and learn a bitter lesson. When LIC can convince IRDA not to upset the advisors, why can't the Fund Houses? The news is that many advisors are slowly moving away to alternate businesses. The exodus would be complete soon. The National Distributors are also finding that selling mutual funds are a loss making proposition. On top of it the further drop in trail from 1st of April 2019 ! Process of throwing out IFAs is complete. Nothing is left to be done anymore. All the expertise that we have gained over the number of years have gone waste. If somebody is telling " Today's pain is tomorrow's happiness" , who is going to subsidize the existence of IFAs today. Only bureaucrats can say such things. Let them stay without salary for few years till better GST collection.
    vinod shiralkar · 5 years ago `
    Instead of such surveys, conduct a survey "Do you Know Mutual Funds" and share the results with the Top SEBI and AMFI officials, I don't think such a survey will open their eyes.
    They will still show the facts n figures from US and Europian countries to show how the commisions are on the higher side in India.
    At present, SEBI instead of Regulating AMCs, regulating IFAs more.
    With such attitude, they are ruining the nascent MF industry, which has started blooming just now.
    I would like to request SEBI to declare their vision and reforms for the next 10 years with a guaranty that there will not be any reforms again before 10 years.
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