Every IFA would have seen instances of failed transactions resulting in due non-payment of brokerage. In fact, one of the primary reasons for your withheld commission is such transactions.
Cafemutual spoke to a few operational heads and RTAs to help you reduce the instances of failed transactions.
Ensure that you check the status of each transaction on website of R&T agents like CAMS, Karvy, Sundaram BNP Fund Services and Franklin Templeton or through mailback services. Follow up with the respective R&T agent if a transaction has failed to find out the reason.
In most cases, transactions fail due to KYC. Hence, it is advisable that distributors should first check if a client is Kyc-compliant. You can check KYC status of your clients by visiting website of KYC registration agencies (KRAs) such as CVL, NDML, Dotex, CAMS and Karvy. Once you visit their website, click on KYC inquiry section. The system would then ask you to key in PAN no. of clients. After submitting these details, the system will show you whether your client is KYC compliant.
If he is not KYC compliant, you can go for either physical KYC or video KYC. In both the cases, your clients would require submitting or uploading KYC documents such as photograph, Pan card, address proof and a cancelled cheque along with the CKYC form. Your clients can share their Aadhaar card copy as a valid address proof. However, remember that they need to mask the first eight digits of their Aadhaar before uploading or submitting it. An unmasked Aadhaar is not a valid KYC proof.
While you can submit KYC documents at point of sales of RTAs physically, Tata MF, Reliance MF, Kotak MF and Quantum MF, national distributors like Fundsindia.com and RTAs like CAMS and Karvy offer video KYC service to help you on board new clients faster.
The next step is to ensure that your clients fill their application form carefully. Even a small mistake like missing out on putting pincode or mismatch in signature could reject their transactions. Remember that transaction could fail due to error in application form even if your client is KYC compliant.
Industry experts said that distributors should go for the digital route to execute transaction successfully. Since investors can generate bank mandate online, the chances of getting their transaction failed due to mismatch in signature diminish.
Jimmy Patel, CEO, Quantum MF feels that distributors should go digital to reduce such chances. “Digital not only saves time, it also reduces the chances of failed transaction arising out of human error like mistakes in filling application form.”
Further, he advised that the industry to look at uniform or common application form across fund houses. Currently, application form offered by fund houses are different across fund houses. This lack of uniformity sometimes causes errors.
We hope that this checklist will help you reduce the chances of getting your brokerage stuck.
