Family members of a deceased IFA would receive the last drawn trail commission till the age of 70 years even if assets under advisory come to zero.
Reliance MF has announced the launch of a unique program for MF distributors called ‘trail non-stop’ in which it promises to pay last the drawn trail commission as a pension to the aggrieved family members of deceased IFAs.
Typically, trail commission is paid to a nominee of IFA in case of his/her demise. However, the commission is payable only if the assets remain in ARN. Experts believe that such commission usually comes down to 50%-80% within 3 years as investors redeem or transfer their assets.
However, Reliance offers to pay commission even if assets come down to zero. For instance, if an IFA had withdrawn a trail commission of Rs 50000 per annum before his/her demise, the fund house would pay the same amount to the family members even if the entire AUM was redeemed or transferred. The benefit is extended to all active IFAs empanelled with the fund house irrespective of their AUM size. An active IFA is defined as one who submits at least one application a month.
Presently, the program is for limited tenure as the commission would be paid till the age of 70 years. The number of payment can be calculated as 70 years minus the age of IFA at the time of death. Let as assume that an IFA died at the age of 45; then his/her family would receive the pension for 25 years (70-45). Also, the highest commission is capped at Rs 12 lakh per annum under this program.
The move was taken after an untoward incident took place during the MFRT meet at Hyderabad when a Raipur based IFA died of heart attack. Reliance MF has introduced this program by aiding the aggrieved family of this deceased IFA.
Himanshu Vyapak, Deputy CEO, Reliance MF said that “The IFA Family will be the beneficiary of this program. Thousands of IFA families who support the industry are the real unsung heroes of this industry and we are just acknowledging their efforts through this program. IFA partners can register their details online at www.rmfpartners.com.”
