Kanpur’s Association of Mutual Funds Financial Advisors (AMFFA), Ranchi’s Mutual Fund Distributor Association (MFDA) and the all Kerala Association of Independent Financial Advisors (AIFA) have urged AMCs to absorb the cost of reduction in TER.
These IFA associations have expressed their grievance against fund houses for not absorbing the cost of TER cut. These associations claim that their commissions have declined sharply after the implementation of the new TER slab.
While the Kanpur association issued a memorandum of grievance against reduced commission structures, the Kerala body decided not to attend AMC meets and entertain AMC officials for new business. Similarly, the Ranchi’s association issued a press release to protest against low commission structure.
Another IFA association in Bhagalpur, Bihar staged a demonstration against fund houses.
Pavan Kumar Jaggi, President, AMFFA said that the mutual fund distribution business has become unviable for them. “Our association members cater to retail investors who do SIP of Rs.2,000 a month. If you calculate trail commission on this amount, it is hardly anything. On top of that, if you get reduced commission, how would you survive,” he said.
Kerala IFA Sam Koshy said that a top fund house has sent an email to the Kerala association assuring them that they will look into the matter. Two other AMCs have also communicated verbally that they will address concerns. “While a top fund house has assured that they will absorb 90% of the TER cut, another fund house said that they will completely absorb the extent of TER cut,” claims Sam Koshy.
