The Sumit Bose committee report has pitched for an advisory model where investors directly remunerate advisors. Also, it has it has envisaged an over the counter (OTC) model where investors directly buy products without any intermediation. It may be recalled that SEBI has given an option to MF investors to invest directly.
The committee has stressed the need to increase financial literacy. “The Government should step up its efforts to improve financial literacy among Indian households. One area of focus should be a powerful, multi-lingual financial education website.”
AMCs have initiated a number of activities after SEBI mandated them to spend two basis points of AUM on investor awareness. However, SEBI is not happy with the quality of IAPs. In a CII MF Summit in June, SEBI Chief U K Sinha had pointed out certain deficiencies discovered by SEBI officials in a random check on 18 IAP events.
The Sumit Bose committee has suggested that the focus of IAPs should shift to financial education in schools, colleges and places of employment. Further, the committee said that the regulators should implement a system of impact assessment of financial literacy actions. “These (IAPs) should not be judged based on number of programs conducted or attendance,” states the report.
