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  Please stop this mis-selling – NOW!
Mr. Bond takes up the dividend selling issue in equity oriented funds from where we left it at the recent WF conference. He lists 10 points that investors are most likely not aware of when they agree to invest in the dividend option of equity oriented funds instead of choosing SWPs for cash flow requirements. With hard data, he showcases how investors can earn more than 3X by simply opting for SWPs rather than dividend payouts.

Why do IFAs undersell themselves?
The recently concluded FIFA annual conference witnessed a very engaging panel discussion with Nilesh Shah of Kotak MF moderating a discussion with 4 champion IFAs – Amit Bivalkar (Sapient Wealth, Pune), Shrikant Bhagavat (Hexagon Wealth, Bangalore), Ashish Goel (Vista Wealth, Delhi) and Lallit Tripathi (Vedant Advisors, Ranchi). We reproduce an edited transcript of one segment of this discussion, where Nilesh asked the panellists what is stopping IFAs from being more demanding with their clients and why the IFA segment is not getting a larger market share than it currently has.

  Our aim is to make every IFA into an EFA
The Chairman of any dynamic organization takes on the mantle of articulating the vision and mission of the entity, and then galvanizes the team to work purposefully towards achieving them. His job is to sense when to change gears and steer the organization towards newer goals that become relevant at different points in time. In Dhruv Mehta, FIFA clearly has a Chairman who knows this and who is delivering very capably on these expectations.

Who says equity is risky?
One of the biggest myths around investments is that equity is risky and only debt is safe. This one myth prevents millions of savers from becoming successful investors. This one myth comes in the way of our industry becoming 10 times larger than it is. And this is one myth that all of us have a responsibility to bust effectively whenever we engage with investors, through any medium.

  Acche din aa gaye kya?
Leading IFAs from across India have given their verdict on the Budget: 7.5/10. No change in LTCG on equities, no increase in service tax on commissions, reduction in corporate tax for small companies to 25% - these are seen as the key positives.

Why can’t we admit the truth for once?
The issue of commissions causing conflict of interest and the regulator’s continuous efforts to tinker with regulations around this, is now 8 years old. Bagariaji says its time for us to first admit the truth – that there does exist a conflict of interest situation. He shares a very interesting perspective on the actual source of this conflict of interest, and from there, leads to an alternative solution that can potentially address the conflict of interest issue while protecting business viability of distributors

  Time for commissions to be regulated
Bagariaji identifies two core issues that are causing repeated regulatory upheavals for distributors and suggests what some may see as radical measures to effectively address these core issues as well as preserve business viability of distribution models.

We need evidence based, not perception based regulations
FIFA, which now represents IFAs from 120 cities across India, is gearing up to engage with the regulator on its proposed consultation paper on the RIA regulations – a paper which will likely have a far reaching impact on business models across MF distribution, including IFAs. Dhruv believes it is time we move away from a perception based regulatory environment to an evidence based one – where rules are made and changed based on clear evidence of the need for change, not merely a perception of a need for change.

  Are we guilty of mis-selling these funds?
There are heightened conversations these days on monthly and quarterly dividends from equity oriented funds including balanced funds.

Indian TERs are in fact among the lowest
In response to Morningstar’s report of 2015 which concluded that Indian mutual funds are among the most expensive in the world, FIFA has produced an incisive analysis that rebuts this conclusion and establishes that if you compare apples with apples, Indian mutual funds are actually among the cheapest in the world.

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