While the decision on revealing distributor commission to investors has been finalised, care should also be taken to protect the advisory community as they help strengthen the mutual fund industry, Puri tells ET.
How will the disclosure of distributor commission affect the intermediaries?
Now that the decision to disclose distributor commission has been taken, financial planners and distributors should not wait till October to have a discussion with their clients. They should sit down with their clients and reinforce the value they bring to the table in terms of product selection, asset allocation etc. It will then be easier for clients to understand that the cost they have incurred is worthwhile. The risk lies in clients interpreting it as something that had been deliberately hidden from them. Then it would be hard to retain their trust. I empathise with distributors because it is not easy to suddenly switch gears. However, a pre-emptive discussion is th ..
