IFAs are concerned over the display of their earnings in public domain. In its August 2011 circular, SEBI had mandated AMCs to disclose the commission earned by those distributors who receive Rs 1 crore across industry or Rs 50 lakh or above from a single AMC. Subsequently in September 2012, SEBI asked AMCs to disclose certain additional information like gross inflow, net inflow, AAUM, etc. of these distributors.
AMCs publish the commission paid by them to their top distributors while AMFI publishes the aggregated commission paid by all AMCs to each distributor.
Some distributors say that the move doesn’t serve any purpose. “It serves no purpose to the clients. It is a gross commission figure. Distributors incur a lot of costs in servicing clients, maintaining infrastructure, paying salaries to employees and so on. The data doesn’t show the correct picture,” says Vinod Jain of Jain Investment.
IFA Associations have already taken up the matter with AMFI. “I have requested AMFI to address this issue. AMFI has taken up the matter with SEBI. We don’t mind if company names are published but if individual names are made public then it encroaches our privacy,” said Ramesh Bhat ofAniram.
“We had taken up the issue with the authorities when the guidelines were announced by SEBI. We are yet to establish the objective behind this move. It does not serve any purpose. We don’t have any problem in sharing our revenues directly with SEBI or AMFI but it should not be put in public domain,” says Dhruv Mehta, Chairman, Foundation of Independent Financial Advisors (FIFA).
Distributors are questioning the objective behind such disclosure. “I wish to know what is being achieved by publishing this data. IFA community has flagged this issue at various forums. Even private companies are not supposed to publish their earnings then why IFAs revenues are made public? I’m against it. It does not have any relevance for investors. Disclosure of earnings can pose a threat to IFAs, ”says Sadashiv Phene, a Mumbai based IFA.
