With the implementation of the new TER regulations, most AMCs have levelled the trail commission across years. The difference between the first year trail commission and second year trail commission has reduced to zero in most cases.
Earlier, the difference between the first year trail and subsequent trail was over 1%. A public disclosure on the schedule of commission available on Citibank India website shows that a few fund houses offered 1.65% as the first year trail commission and 0.65% in the second year. The aggregate three-year trail commission of most fund houses was close to 3%.
However, the commission structure uploaded on Citibank India’s website shows that the difference has now come down to zero in most cases. You can look at the new schedule of commission by clicking here.
Earlier, SEBI has reportedly asked fund houses to pay uniform trail commission across the investment tenure.
A further analysis of the commission structure shows that most fund houses have reduced trail commission by 15-20 bps largely due to reduction in overall TER. However, most schemes have kept their trail commission at over 1%.
