Mutual fund distributors protest abolition of entry load
Over 100 distributors of mutual fund products protested outside the headquarters of Securities and Exchange Board of India here today against removal of entry load on mutual fund schemes.
By PTI |
MUMBAI: Over 100 distributors of mutual fund products protested outside the headquarters of Securities and Exchange Board of India here today against removal of entry load on mutual fund schemes.
Distributors , majority of whom had come from cities as far as Nagpur, Akola, Aurangabad, Jabalpur and Nashik among others said it is almost impossible to collect advisory fee directly from investors as stipulated by Sebi.
As per the earlier system, distributors would get 2.5 per cent commission called entry load on business generated by them from asset management companies. Now, they would not get this commission from AMCs but can ask the investors to pay them for the advice\service rendered.
However, distributors have cried foul saying investors here are not matured enough to give a separate cheque to distributors towards advice or service. They said they may be forced to stop selling mutual fund products and sell only insurance and post office schemes.
As per data available with association of mutual funds in India, there are 92,500 mutual fund distributors in the country as of March 2009 of which 73 per cent are individuals.
Banks dominate mutual fund distribution with over 30 per cent share in the Assets Under Management (AUM).
Distributors , majority of whom had come from cities as far as Nagpur, Akola, Aurangabad, Jabalpur and Nashik among others said it is almost impossible to collect advisory fee directly from investors as stipulated by Sebi.
As per the earlier system, distributors would get 2.5 per cent commission called entry load on business generated by them from asset management companies. Now, they would not get this commission from AMCs but can ask the investors to pay them for the advice\service rendered.
However, distributors have cried foul saying investors here are not matured enough to give a separate cheque to distributors towards advice or service. They said they may be forced to stop selling mutual fund products and sell only insurance and post office schemes.
As per data available with association of mutual funds in India, there are 92,500 mutual fund distributors in the country as of March 2009 of which 73 per cent are individuals.
Banks dominate mutual fund distribution with over 30 per cent share in the Assets Under Management (AUM).
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