KYC, change of bank mandate are among the major challenges faced by IFAs
Market regulator SEBI had invited Foundation of Independent Financial Advisors (FIFA) today to get its feedback on the operational hurdles faced by distributors. The meeting was chaired by R K Agarwal, Whole Time Member of SEBI and six directors of FIFA.
“SEBI has asked us to give the viewpoints of all IFAs regarding operational issues faced by them. SEBI was receptive to the concerns highlighted by us. We also brought to their notice that the income levels of IFAs has gone down after the ban on loads,” says Yogesh Sharma, Director, FIFA.
The recent uniform KYC rule introduced by SEBI which requires IFAs to get in-person verification is said to have been acting as a deterrent for getting new clients. IFAs have long been requesting that their nominees should be entitled to trail commission in the event of their death even if the nominee is not an ARN holder.
Last year SEBI had mandated KYC for all investors in mutual funds irrespective of the ticket size. Earlier KYC was required only for investment of Rs 50,000 or above. IFAs have been contesting that their investors don’t need to go through the KYC process again if they are already KYC compliant with banks.
Distributors
have also been requesting the industry to introduce a common application for
investing in all fund houses. Apart from these issues, IFAs are facing hurdles
in changing bank mandates for their clients. “There are a lot of formalities
required for changing your bank mandate. It is really time consuming. Also some
fund houses don’t accept KYC from NSDL,” says Gajendra Kothari of Etica Wealth
Management.
