MF News Distributors cannot call themselves IFAs or wealth advisor: SEBI

Distributors cannot call themselves IFAs or wealth advisor: SEBI

In addition, SEBI has asked individual RIAs not to offer distribution services to their clients.

Sridhar Kumar Sahu and Nishant Patnaik Feb 17, 2020

Mutual fund distributors are no longer allowed to use nomenclature like ‘independent financial advisers’ (IFAs) and ‘wealth managers’ without registering with SEBI as RIA. The decision was taken at the SEBI board meeting held today in Mumbai.

SEBI has amended SEBI Investment Adviser Regulations after considering issues in all four consultation papers and public comments. Here are the other key changes

Individual RIAs cannot offer distribution services to their clients
RIAs can offer execution services through direct plans in mutual funds
SEBI will bring more clarity on fee payment and put a cap on upper limit of fees charged to clients
The regulator will clarify net worth, qualification and experience and so on

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36 Comments

Bhavesh Sharma · 4 years ago `

Can a proprietor firm segregate Advisory and Distribution

Vishal Rastogi · 4 years ago `

lo bhai dub gayi bachi izaat bhi ab...........distributors jo ki mehnat se kaam katen hain unke piche haath do ke pare hain udhar bechare Sahara ke investor raat din ro rahen hai.......Koi lauta dou mere woh di.....sry paise.... !

JAIKUMAR · 4 years ago `

As a person who does mutual fund and insurance and other financial products what will be the apt word to describe him. can it be distributor financial products

MFG · 4 years ago `

Most investors are not ready to pay and distributors cannot survive on current remuneration, so then why will anyone even sell/advice on mutual funds anymore?

Ketki Jignesh Shah · 4 years ago

Legally it's called as AGENT

GOWRISHANKAR KASI NAGARAJAN · 4 years ago `

Hi MFD friends,
The above development seems to be a feather in the cap for the investor. But as far as the Distributor is concerned, it is just another blow on the back and perhaps the MFD may or may not be able to get up after receiving this mega blow. Gone are the days when the MFD was getting a handsome commission. Today it just trickling, the revenue avenues for the small, humble, semi-literate distributor has totally vanished or will vanish in the short run. The Regulator seems to be log-sided in their approach towards the humble distributor or the insurance agent. They have been hammering nail after nail on the coffin to ensure that the distributor never ever ever gets up to sit down in his coffin. But what about those big houses like the Banks who not only act as an advisors, but also play the role of distributors though the knowledge of MF/ Insurance products is abysmally low. How do we take up this issue. Can any body file a PIL or bring a stay order whereby banks stop distributing MF and insurance products? Its time that the Distributors formed into a strong National Body and question the undemocratic moves of the Regulator. Lets debate and fight.

Anil Jadhav · 4 years ago

You have pointed out things correctly. Even these days our discussion is only on this. We are investing our hard earned money on all this high tech software and make our client comfortable with our Investments advice and because of which he has remained invested in all financial products as per his requirements. This industry has survived because of the distributors and their advice. When nobody was there in the equity market to guide the prospective investors.

And all of sudden when things have turned better and market is gained confidence, the regulators like SEBI, AMFI etc are backstabbing us.

The Regional and National bodies who represent us have failed to do their jobs and it seems that their focus was somewhere else only. Abhi to Jago, Kuch to karo.

When AMC personnel comes on television, their discussion on TV channel and action or representation in AMFI or SEBI aren't matched. They have been been playing different roles and not in the interest of Investors. I also heard that AMC has only 2 to 3 people representation and other industry leaders dominates because of the number game. Since we have less number in SEBI meetings, our voice isn't heard. So to avoid such things, we need to insist for independent body, where in the decision would be taken and then to be communicated to SEBI.

Rajnish Mahajan Anyway Profit · 4 years ago `

Absultely unfair. They want MFD to be held responsible if client complaints that MFD has adviaed wrong prroduct but SEBI says you cannot use advisor.

Monil Daru · 4 years ago `

It's better to sell mf by SEBI ONLY..SEBI IS ALWAYS NEGETIVE WITH MFD..WHO WILL PAY MFD EXPENSES..NO1 READY TO PAY ADVISORY FEES

Ketki Jignesh Shah · 4 years ago

SEBI needs to out floor on advisory fees as well. Otherwise RIA as a community may be next to get extinct, after MFD...

Ratnes · 4 years ago `

??? ??? ?? ?? ??? ??. ?? ???? ?? ?? ?? ???? ???? ????

Pradeep Kumar · 4 years ago `

This is very fair & transparent.
Now only a genuine advisor who is actually independent can call himself IFA.
Many distributors who disguised & misrepresented as Independent Advisors,
will have to call themselves "Distributors".

Good move by SEBI.

krishnan Iyer · 4 years ago `

MF is supposed to be test match products but regulations seem to keep changing like One day....Nothing mutual about it

Troll · 4 years ago `

Good Move,
After all SEBI came to know what’s happening in industry on the name of IFA/Wealth Advisor... (There is lot of difference between Advisory and Distribution)

Now Time has comes to show on..... Be positive and go ahead.....

Ketki Jignesh Shah · 4 years ago

Can't we get min Advisory fees as a part of regulations and also no under-cutting...

Amar · 4 years ago `

I support SEBI's move.

MFDs compare themselves with Doctors.

No good Doctor tells a patient - I will treat you for FREE and take my fees from Pharma medicines manufacturers!

If you want same respect like Doctors, then start charging fees to clients as an Adviser.

else be like a Pharma distributor.. don't call yourself financial Doctor.

ravi G · 4 years ago `

Welcome step from SEBI

rajesh Datla · 4 years ago `

Dear Friends,

Welcoming step to SEBI. hope all experienced distributors turn as a RIA and start service fees for their valuable services. All the best to MFD Community. Once again thankful to SEBI.

Rakesh Belludi · 4 years ago `

If a person gets commission which is beyond the salary of people employed with the regulator, You just can imagine how hard it is to digest!!! In a fight against the hefty earning distributors regulator kills the aspiring advisors

Abhishek Leekha · 4 years ago `

If Distribution existing is under LLP. Can an Individual still be RIA and continue with the Distribution? Looking for some light?

Gop · 4 years ago `

SEBI should simultaneously say, what is the nomenclature to be used by IFAs in their website, visiting cards, communications etc

Ramlal mishra · 4 years ago `

Cafemutual welcomes your views.
Any disagreements or criticisms must be expressed in a dignified manner.
All fields are required. Thank you

Cafemutual please intervene ..... some so called expert is making personal allegations . And giving warnings as well. . And behaving like SEBI????????

Gasper D S · 4 years ago `

Distributors who have last 30 years of experience,

Gadper d s · 4 years ago

Distributors who have 20 years of experience, under gone so many trainings, exams , seminars..studied mutual fund starting to till now ..
Are not their value of advice is worth?
Who are efficient, competent, sincere, dedicated, and wise say nothing to their client? Only logistic?
Very sad...

Gadper d s · 4 years ago `

Rajesh datla · 4 years ago `

We always support to SEBI decisions. SEBI is form only to protect investors and not for MFD community.
If you want ethical adviser gates already open through RIA. Accept naked truth.

Rajesh datla · 4 years ago `

It's wonderful achievement behalf of Investors. So surprising every one try to remove Financial or Wealth advisers in their offical facebook and websites. Once again thanks to SEBI & Cafe Mutual. Thanks a lot to support investor community. In hyderabad & Warnagal most of MFD's removed.

Change need to be done. Congratulations to Mutual Fund investors. AMC's concentrate on Investor education seminars and also publish articles in Cafe mutual like public domains... I Love Cafe Mutual and SEBI...

Regards
MF Investor
Rajesh D

pankaj Kasat · 4 years ago `

*MOST IMPORTANT QUESTION :

WHAT HAPPENS TO ALL THE "DISTRIBUTORS" WHO FLAUNT THEIR
"FINANCIAL ADVISOR AWARD"

SEBI should BAN it

Desmond Mascarenhas · 4 years ago `

All this started with mess in the Indian economy. The distributors have to bear the brunt of sins of the current Government.

Hrushikesh · 4 years ago `

SEBI seems to have agenda to destroy MF industry. There are DIRECT and Online Channels for those who don't want any broker/advisor/distributor. So there was no need to harass the indirect channel / brokers/ advisors/distributors. What happened after 24th Oct.2018 , is known by all but still Regulators have not changed their biased mindset about Brokers and Distributors

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