Nine out of 10 direct plan investors exit their SIPs within five years

It is futile for advisors who worry about Direct Mutual Funds, actually it is a blessing in disguise, equity investing is not as easy as it may seem during bull runs, guaranteed good returns are only in the long run and not all investors have the patience or the vision, they need counselling and advice of someone who has been around equity for long enough periods. All the Direct Mutual Funds have done is basically remove those investors who used to ask for pass back. So I am kind of glad this option is there for people who want to save the commission to brokers. Makes life easy and these people will eventually turn back to advisors.

A very useful article...

Infact AMC itself promote direct plan via media, it's dead end for mf advisor, upfront already stop, on only trail base income will not enough for us, lot's of ARN holder left this industry, who will get money to AMC? When market down we are only tackle to clients. So if there is no advisor there is no retail sector over mf industries. Direct plan should be banned

please send one copy to sebi and amfi

Direct channel should shut.It may spoil MF industry whole

Will retail distributor can withstand current trend.

I AM NOT A BIG WRITER OF ARTICLES. PEOPLE AT THE HELM MAY KINDLY EDIT, BEFORE PUBLISHING,
AS I LOVE MY NATION IN GETTING SELF SUFFICIENCY AND STRONG IN ALL RESPECTS.

Sirs, If I deviate from the issue , please delete my communication.

My opinion is abolishing entry load made many distributors jittery , who are depending on mutual funds.
Up dating and interpretation of happenings in Policy decisions,Industries requires much interest and knowledge. Those distributors with Insurance are not much bothered. The concept of Mutual fund had been brought to India basing on Foreign countries.

I know sale of a Cement bag (Rs. 360/- plus)by a business man earns Rs. 25/-.Wholesaler gets Rs.20/-, besides,cash discounts and trade discounts and so on. On the whole, a margin of 10% is there for a Cement bag. Even a smart Patanjali dealer gets 6 to 8% on their sales. Where as, what is the amount fee received by a distributor for canvassing Rs 10000/-? Particularly in Semi urban and Rural areas Commissions have been dwindled. Besides the many diktats by SEBI, Amfi and other agencies for the past 5 years.

Is 2.25% entry load is an excess charge, when you service a small investor? A distributor serves in explanation of the scheme details etc., filling application, KYCs, getting unit statement and in serving redemption and answering enquiries and so on.

For the above, many distributors may claim use of technology. Agree.What is the cost of a Computer and a laptop and their maintenance. If had an office, what will be the expenditure on the establishment? Is it correct to deal with customers from the Residence?

People at the helm of higher level can claim that misuse of the facilities.I am not elaborating here, because you all know. Loop holes have to be rectified with understanding repercussions on the Industry. The cost of the two wheeler ( besides replacement), its maintenance, petrol exp is also eating much of revenues of the individual IFAs. How many distributors are active now?

I strongly believe that Rural and urban penetration enables the distribution of Industrial wealth of our beloved India, there by improvement of all the sections of the Citizens.

Then How to propagate the concept in Semi urban and rural areas? How long to depend on FIIs mercy.
I strongly believe that we will be successful to face FIIs frequent redemption's even 5% cost of Gold and other investments conversion from the Rural and Semi urban area Citizens. BUT CONCERTED EFFORTS ARE REQUIRED.

A ray of hope.I opine we are collectively successful in preventing a drastic fall in spite of considerable Redemption's from many quarters, because of stable SIPs for the last three years.

Can we consider short term funds as stable investments? Will they be useful to match long term requirements of capital formation of growing thirsty of Indian Industry? I do not think so.
WE HAVE EXCELLENT ECONOMISTS AND ANALYSTS WITH VAST KNOWLEDGE. SIRS! MAKE THOSE
PEOPLE TO DISCUSS TO FIND SOLUTIONS.

I am not a fit person to elaborate corporate governance and other things. I LOVE TO SEE MY INDIA AS A PROSPERED NATION IN ALL ANGLES.CHANGE OF ATTITUDES WILL MAKE US GREAT.