IFA Associations flag commission disclosure issue with AMFI

Dear Sir

It is to bring to your notice about ridiculous, maligned and one sided circular being issued by market regulator SEBI to disclose mutual fund distributor’s commission in client statements going forward.

Currently, mutual fund distributors are already giving an annual disclosure to AMFI which states that we are disclosing commissions to investors. Also, AMCs disclose the commissions paid to the top 400 distributors on their websites. AMFI also publishes the aggregate commissions earned by these distributors across all AMCs.

Despite AMFI’s (industry and AMC body) plea to not go ahead with commission disclosure rule in account statements, SEBI has instructed AMCs to disclose commissions in half-yearly account statements.

The following points have come up for notice and review after this circular being passed:

1) Has SEBI received complaints from customers in regard of non-disclosure of commissions by distributors? If not, why the need for senseless circulars? And if yes, then why not punish the culprits rather than destroy the whole IFA community.

2) Giving too much information to investors will only confuse them and resist them to take up services of MF distributors wherein they are guided and educated by our community to invest in mutual funds, provide consultancy services of picking up right funds depending on clients investment portfolio, past experience, income profile, life stage, risk profile, investment horizon, doing portfolio review and rebalancing, guiding the client in difficult times etc. Does SEBI think that such services are free in nature and IFA as a community should not be there in the first place? Let them reply in plain terms if distributors are required or not in the industry.

3) The move will be inducing pass back culture which only established distributors and big banks can afford. No more new distributors to join the industry. What happened to the idea of Skill India? What happened to idea of self sustainable employment generation for educated youth in India? Are we happy with less than 10000 active distributors in a country of more than 125 crore people? How does SEBI encourage new and professionally educated persons to join the industry?

4) Why doesn’t SEBI make it mandatory to disclose commissions across products like structured products, PMS (upto 4-6%), private equity (up to 4-6%), insurance plans (up to 50%) and NCDs (up to 6%) to disclose their commissions? Only mutual funds have been wealth creators among these ridiculously expensive products. All other products have proven to be wealth destructors. Why the regulators are biased against the Mutual Funds distributors only. Also, all industry depends on commissions to selling agents, even a bottle of shampoo sold in India, commissions are paid to distributors and retailers. Do they disclose their commissions in the bill provided to clients. Then why on mutual fund commissions? Smells of rat.


5) There is already a provision of Direct Mutual Funds Plans in all categories for educated and well heeled investors who have high financial literacy and do not wish to take services of a distributor. Also, distributor’s income and commissions are capped through various provisions including maximum expense ratio of fund, capping on upfront commission etc. Then what is the purpose of such a disclosure to investors who have been educated and served over the years by distributors. Does the regulator considers distributors to be only taking up the service of educating and bringing new clients to the industry only to be grabbed up by direct plans lure in future. How does the regulator ensure continued income to distributors for their efforts to educate and bring the clients to the mutual fund industry?

6) The angle of corruption in SEBI board and officials is to be also checked. Its highly likely that the SEBI board, officials and chairman are bribed by big banks and AMC’s who want to get rid of the distributors which are their direct competition. That way they will start enjoying monopoly in mutual fund distribution. All at the expense of the investors and distributor community. Assets and liabilities of all SEBI officials, board members and chairman should be scrutinized by IB and concerned authorities.

SEBI as an industry regulator is acting with malaise and partiality against the distributor community on the behest of the large corporate distributors and banks.

We request you sir to look into the issue seriously and have all angles of SEBI circular being checked. We demand that this SEBI circular on commission disclosure be rolled back asap and no one should be allowed to destroy a budding industry and take away hard earned income of hard working people of India and also not to create disruptions in the market place in the name of investor protection.



I have written the above letter to the Prime Minister and President of India online grievance mechanism. All IFA can copy / change language as they deem fit and proper and write to the PM and President.
10 mins task. Pls do not hesitate. Let 1000 compliants reach the office of the PM and President and they force SEBI to withdraw this circular.
pgportal.gov.in- PM portal
helpline.rb.nic.in - presidents office helpline

If SEBI is very particular about making it transparent about expenditure then it should provide details of salaries and other overheads too which too contribute to overall exp just asking for ifa remuneration will backfire as it will snap the very primary source of the investor uncomfortable
You provide direct plan and you print ifa commission is it proper, this will hamper those who are generating income with their hardwork and in the long run it will hurt investors too

It's just like disclosing profit margins besides MRP of the product. Why IRDA is not insisting on disclosing Commission in account statements and policy documents. IRDA is like generous mother. SEBI is like Step Mother.

Dear members really this move from SEBI is a indirect promotion of Direct plans rather than regular plans. We have protested it in meerut also under the banner of FAAM in the form of NO LOG IN day last complete week for all AMC successfully and credit goes to all our esteemed members of MEERUT. We should continue to fight against it

When v go to buy anything, shopkeeper so us MRP only. They are not shows cost price. In our business SBI bend on Aum amounts which is 1.5% is varied. Now what is meaning to show our commission in statement.Sebi already bend on it.Sebi wants to remove all Ifa as likes RTO agent's removed from the mutual funds.

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

Dear Sir

It is to bring to your notice about ridiculous, maligned and one sided circular being issued by market regulator SEBI to disclose mutual fund distributor’s commission in client statements going forward.

Currently, mutual fund distributors are already giving an annual disclosure to AMFI which states that we are disclosing commissions to investors. Also, AMCs disclose the commissions paid to the top 400 distributors on their websites. AMFI also publishes the aggregate commissions earned by these distributors across all AMCs.

Despite AMFI’s (industry and AMC body) plea to not go ahead with commission disclosure rule in account statements, SEBI has instructed AMCs to disclose commissions in half-yearly account statements.

The following points have come up for notice and review after this circular being passed:

1) Has SEBI received complaints from customers in regard of non-disclosure of commissions by distributors? If not, why the need for senseless circulars? And if yes, then why not punish the culprits rather than destroy the whole IFA community.

2) Giving too much information to investors will only confuse them and resist them to take up services of MF distributors wherein they are guided and educated by our community to invest in mutual funds, provide consultancy services of picking up right funds depending on clients investment portfolio, past experience, income profile, life stage, risk profile, investment horizon, doing portfolio review and rebalancing, guiding the client in difficult times etc. Does SEBI think that such services are free in nature and IFA as a community should not be there in the first place? Let them reply in plain terms if distributors are required or not in the industry.

3) The move will be inducing pass back culture which only established distributors and big banks can afford. No more new distributors to join the industry. What happened to the idea of Skill India? What happened to idea of self sustainable employment generation for educated youth in India? Are we happy with less than 10000 active distributors in a country of more than 125 crore people? How does SEBI encourage new and professionally educated persons to join the industry?

4) Why doesn’t SEBI make it mandatory to disclose commissions across products like structured products, PMS (upto 4-6%), private equity (up to 4-6%), insurance plans (up to 50%) and NCDs (up to 6%) to disclose their commissions? Only mutual funds have been wealth creators among these ridiculously expensive products. All other products have proven to be wealth destructors. Why the regulators are biased against the Mutual Funds distributors only. Also, all industry depends on commissions to selling agents, even a bottle of shampoo sold in India, commissions are paid to distributors and retailers. Do they disclose their commissions in the bill provided to clients. Then why on mutual fund commissions? Smells of rat.


5) There is already a provision of Direct Mutual Funds Plans in all categories for educated and well heeled investors who have high financial literacy and do not wish to take services of a distributor. Also, distributor’s income and commissions are capped through various provisions including maximum expense ratio of fund, capping on upfront commission etc. Then what is the purpose of such a disclosure to investors who have been educated and served over the years by distributors. Does the regulator considers distributors to be only taking up the service of educating and bringing new clients to the industry only to be grabbed up by direct plans lure in future. How does the regulator ensure continued income to distributors for their efforts to educate and bring the clients to the mutual fund industry?

6) The angle of corruption in SEBI board and officials is to be also checked. Its highly likely that the SEBI board, officials and chairman are bribed by big banks and AMC’s who want to get rid of the distributors which are their direct competition. That way they will start enjoying monopoly in mutual fund distribution. All at the expense of the investors and distributor community. Assets and liabilities of all SEBI officials, board members and chairman should be scrutinized by IB and concerned authorities.

SEBI as an industry regulator is acting with malaise and partiality against the distributor community on the behest of the large corporate distributors and banks.

We request you sir to look into the issue seriously and have all angles of SEBI circular being checked. We demand that this SEBI circular on commission disclosure be rolled back asap and no one should be allowed to destroy a budding industry and take away hard earned income of hard working people of India and also not to create disruptions in the market place in the name of investor protection.



I have written the above letter to the Prime Minister and President of India online grievance mechanism. All IFA can copy / change language as they deem fit and proper and write to the PM and President.
10 mins task. Pls do not hesitate. Let 1000 compliants reach the office of the PM and President and they force SEBI to withdraw this circular.
pgportal.gov.in- PM portal
helpline.rb.nic.in - presidents office helpline

If 1000 messages are received, government will be forced to listen to us.