Foreign mutual funds woos agents with gifts

Capital market regulator Sebi's efforts to discourage fund managers from offering gifts and incentives to large-sized distributors and independent financial advisors don't seem to have yielded the desired results. Fund houses are still seen offering 'extra sales toppings' in the form of junkets and tickets to premier events. A foreign fund house, which has garnered1,500 crore worth of asset in less than a year, is understood to have showered largesse on its distributors who are enthusiastic about selling products of this recently-launched fund house.

The fund house, in its effort to ramp up asset base, offers an upfront commission in excess of 1.25% and annual trail commission close to 1%, sources in distributor circles said. This fund house is also known to have taken high-volume distributors on foreign trips. The fund house in question is scouting for a partner, preferably an Indian bank, to carry out asset management business in India, sources said.