MF News IFA Associations flag commission disclosure issue with AMFI

IFA Associations flag commission disclosure issue with AMFI

IFAs suggest that this disclosure could be in percentage form.

Nishant Patnaik & Ravi Samalad Apr 13, 2016

Members representing IFA Associations - Financial Intermediaries Association of India (FIAI), Karnataka Association of Mutual Fund Advisors (KAMFA), IFA Galaxy and United Forum met AMFI today to discuss the repercussions of SEBI’s latest diktat on their business.

One of the main grouse of the distribution community is over the disclosure of absolute commission. They say that this number can be misinterpreted by investors which can induce pass back practice. Rather, IFAs suggest that this disclosure could be in percentage form. “Investors won’t realize that the disclosure is ‘gross commission’. We pay service tax and income tax on this gross commission and have various other expenses over and above that. The gross commission figure will give a wrong picture to investors,” says a Navi Mumbai based IFA.

IFAs who attended today’s meeting told Cafemutual that AMFI gave a patient hearing to them.

Meanwhile, Jayant Sinha, Minister of State for Finance recently responded to an IFA on Twitter that he is in talks with all stakeholders and will be happy to meet the industry delegation to discuss this issue.

It remains to be seen if SEBI reconsiders it decision.

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33 Comments

santosh kumar singh · 8 years ago `

I agree to respected members & i also want to join IFA association ...........

CHIRAG · 8 years ago `

A very less community of IFA must take notice ,disclose commission on statement of Account will harmful to us all .

Juned Ahmad Siddiqui · 8 years ago `

Well Done Associations, we should expect best from the regulator,I think SEBI will not disappoint us.
As SEBI knows we did a lot to spread MF schemes .

Ganesh H R · 8 years ago `

Good initiative by KAMFA and other organisations, well done,

g.B.NADGIR. · 8 years ago `

It is very nonsense move of SEBI impact of this may move to a unhealthy practice like Insurance sales and there are so many way out for unhealthy practice by IFAs.To curb wrong sellings SEBI has already implemented many measures and IFA must get through some exams and trainings to update his knoledge and practise in standard way of selling financial products.Hence SEBI must thoroughly consider the matter in all angles of pros and cause of implementing this regulation.I strongly protest the issue.

dinesh Kr Maurya · 8 years ago `

Varanasi MF association(MFDAV) done well for protest against SEBI to mf commission discloser..and no login day celebrated

Madhu Sudan Uppal · 8 years ago `

Good move. But feel it is no use meeting AMFI. Because the move indicates Promotion of Direct plans and the design of disclosure indicates the same and might be the involvement of AMFI in this decision making.

c mathanmohan · 8 years ago

There is no use in meeting and discussing with AMFI they have no powers to take any decision pro IFA community.They are toothless volunteer Association just to implement all the damaging decisions with the help of ALL AMCs, taken by SEBI and Finance Ministry like No upfront commision,Service Tax,Direct Investment and now Disclousure of Gross Commission in the SOA to Investors with Different NAVs for Direct & Regular.

Ravi V · 8 years ago `

I think that the hue and cry raised over this issue of "Do not disclose commission to clients" itself will create a doubt in the minds of the clients / investors. They will start thinking that we are earning a huge amount that is being with held from them.

Ravendra · 8 years ago `

If sebi wants to write he also his fee and all exp which born by investor regarding investment.only IFA commission why

SANTANU GUHA · 8 years ago `

I am totally against this move.I don't understand why SEBI is so interested in showing our commission to the investors.It is not SEBI rather it is the IFAs who have brought glory to the MF industry as whole since the start of UTI in 1964.Mutual fund afterall is not a stock broking business where you have to arrive at the cost price after adding the brokerages.

santosh Hegde · 8 years ago `

Why only IFA'S disclose commission. why not all employees including government employees and directors of all regulators disclose.

Ajai Kumar purwar · 8 years ago `

Very nice begining with SEBI and Amfi key persons , we are hopeful that they will understand our CONCERNS but we should need National distrbutor platform to address our griverances. Thanks to those who represent us.

KPS Parmar · 8 years ago `

I am agreed with IFA community.Why SEBI wants to destroyed this industry

ANIL PRASAD SAH · 8 years ago `

Yes I agree to IFA members.

Shailesh Sampat · 8 years ago `

If commission disclosure is not avoidable then One sugession from me is to print TER along with the distributor commission in the same format wheather it may be in % format or absolute format. That will create more realistic picture and will fulfill the purpose of the change.

Only showing distributor commission will be misguiding the Investor that distributors are stealing their profit without considering that distributor is also running their business/profession where overheads are also included.

arijit shah · 8 years ago `

This is a clear intended move to destroy the distribution channel in the name of transparency by the SEBI.

mahesh k sharma · 8 years ago `

Ya I agreed with ifa association ...

vinod kumar harjai · 8 years ago `

I fully agree with Ifa association,we should strongly put our view of protest to SEBI,
as the disclouser of commision can be in % terms,
2nd we are working in the inerest of Investors, discloser will damage our image & paasback will start,which is against the norms of SEBI

D C PATNAIK · 8 years ago `

Only non co operation movement will help to fight with SEBI

Rahul Joshi · 8 years ago `

Pls do not request to keep loopholes as to disclose brokerage in percentage terms.

Rahul · 8 years ago `

Thanks all who are active on this issue & Kanpur IFAs. Action is due to our collective efforts and be in force forever. AMFFA Kanpur is with you.

GOPALAKRISHNA · 8 years ago `

The Associations should also ask for the stance of the AMCs immediately. Because, they should not play a double game. If the AMCs, need IFAs, they should support us, when v r in distress.
Its high time, V all need a regulatory body for Mutual Fund Industry, just like TRAI, IRDAI etc.,.

ROOP KISHORE · 8 years ago `

DISCLOSING OF BROKERAGE PROMOTE PASSBACK AND CHANGE INTO DIRECT INVESTMENT. AFTERALL IFA WILL BE FINISHED.

brajesh · 8 years ago `

I think we should be courageous enough to face all the negative music above all we are dealing in a high volatile market...

Alok Khanna · 8 years ago `

Thanks to the members of the respective association and the representatives of AMFI of kind hearing, we as IFA are very much hopeful of overruling the recent norms of commission disclosure. As IFA we have been accepting all the regulations but need to look into them severally.

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