MF News MFD associations cannot use the word IFA: SEBI

MFD associations cannot use the word IFA: SEBI

SEBI has asked AMCs to convey to MFD associations that they will have to remove the word ‘IFA’ from the name of their associations.

Nishant Patnaik Oct 4, 2023

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MFD associations will have to rename their association if their association’s name contains the word ‘IFA’ or ‘independent financial advisor’.

SEBI chairperson Madhabi Puri Buch said that it has already asked AMCs to convey to MFD associations not to use the word ‘IFA’ in the name of their association. They will have to remove the word ‘IFA’ from the name of their association, said Buch.

Buch said that at the ARIA event held today in Mumbai.

Highlighting a few instances of malpractices by industry players, Puri said:

A few RIAs have been renting out their licenses which is not allowed
A direct plan platform has received advertisement income from an AMC which is exactly in line with the commission, i.e. the commission amount is exactly related to the volume of business it generated

Acknowledging the good work of RIAs, Buch said that SEBI wants to create 10 lakh RIAs who work for the welfare of investors.

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3 Comments

Signature Financial Services · 8 months ago `

Welfare of Investors only happen when everyone come from same intentions. Here everyone cooking their own food but expresses that taking care of investors and all. I know some of the MFD do malpractice but it doesn’t mean every one doing same. And do the change of name or removal of IFA will change their practice or help investor in better shape? I don’t think.

It would be better to do investor awareness programs

Yuvraj Gurnani · 8 months ago `

How do the direct platform like Grow app and ET money generate income from Direct mutual fund plans ?

Laxmikant · 8 months ago `

Some of the Direct Plan platforms, so called no brokerage setups are not only earning income, but in huge figures. Mr. Yuvraj has rightky poibted out some names. Even the observations of Ms. Buch sites one example.
One more anomaly, an Insurance Advisor who is earning comissions at a large multiple of that by an MFD can call himself an Insurance Advisor.

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