IFAs concerned about the possible impact of the proposed measure on their business.
IFA groups, The Foundation of Independent Financial Advisors (FIFA, Mumbai and Mutual Fund Distributors Association (MFDA, Gujarat) have taken up their concerns on the proposed direct plan structure with SEBI. They have asked SEBI not to go ahead with direct structure. However, it appears that SEBI is unlikely to modify or withdraw its measure.
FIFA had suggested to SEBI earlier that introduction of a direct plan could have the unintended consequence of depriving the retail investor of investment advice.
DFDA has been building up a campaign among AMCS and distributors against the direct plan. MFDA, Gujarat too has written to SEBI seeking a review of the proposed measure.
Though details on the direct plan – on whether SEBI will specify the maximum TER or whether it will apply to all schemes are not known, IFAs are concerned about the possible impact of this measure on their business.
Some AMC officials are of the view that direct plans are an expensive proposition as it would increase their cost overheads to service direct clients.
