Majority of MFDs give thumps up to the new ARN transfer norms

Majority of mutual fund distributors are happy with the new AMFI rule on transfer of AUM. According to the new norms, AMCs are now allowed to pay trail commission to MFDs if a client transfers his assets from one MFD to another.

This came after AMFI received several requests to review the ARN transfer norms which did not permit AMCs to pay trail commission to the new distributor if an investor initiates transfer of his assets to the new MFD.

In this context, Cafemutual ran an opinion poll in which over 1230 MFDs participated. Of this, 52% MFDs said that the new norms will help them get clients who are underserved. 

However, 30% of the total respondents believe that it will lead to poaching of clients. They fear that larger players with big pockets will acquire their clients. 

The rest of MFDs say that the move will not have any significant impact on their business. 

Here is the snapshot of the opinion poll result.

AMCs can pay trail commission to the new distributor if investors initiate transfer of their assets. How will this impact you? 

Help me get clients of other distributors who are underserved : 639 votes, 52%
Lead to poaching of clients : 369 votes, 30%
No significant effect on my business: 221 votes, 18%