Ankit Patel (23), a Lucknow-based mutual fund (MF) advisor, is worried about the prospects of his advisory business if the commission he gets has to be disclosed in the monthly account statements given to investors. According to him, it's hard to convince new investors about mutual funds as an investment product. “If investors get to know my commission, they might discontinue investments with me or ask for a share of it,” he says.
His apprehensions come in the wake of the Securities and Exchange Board of India (Sebi) asking the Association of Mutual Funds in India (Amfi) about fund houses’ view on disclosing distributors' commission in investors' account statement to further increase transparency.
Patel's views are echoed by many in the sector. Most fund houses are not in favour of any such move. They say it will impact distributors as well as independent financial advisors, who are considered the foot soldiers of the sector. This, they say, will have a negative impact on the sector.
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