IFAs open up one more avenue for generating revenue through the senior agency model
Many IFAs are looking at taking up senior agency model under LIC. Under this model, an IFA can take an agency under a new license and recruit sub-brokers under him. The sub- brokers are then trained by him and also provided with proper infrastructure to work. The IFA is paid a specific commission from the business generated by the sub brokers.
“I have finally decided to take up this model to expand my insurance business because I feel the agency model has lot of potential to generate revenue. It is a very tedious job to train sub-brokers but I see this model is still underpenetrated,” said Pradip Agarwal, IFA.
His views find resonance among other IFAs. “It is very difficult to generate revenue from mutual fund business and therefore we need to look at alternative source of income. The senior agency model seems to be a lucrative business,” says Madhusudhan Ray, IFA.
Dipak Kumar Jha, IFA also has similar same views. “We do not know what would be the future of mutual fund industry as everything depends on the regulator. We all are struggling for survival in this industry. Therefore, this kind of agency model will help us to survive,” says Jha.
On the other hand, a few IFAs feel that it needs a lot of time and dedication to nurture this business. “You need to devote a lot of time to make the model run smoothly and give you returns. As IFAs we already have a lot to do and adopting agency model requires extra time and effort,” said Suresh Mohta, IFA.
