Distribution of mf through distributore/IFA or direct and the growth of Mf industry depends on some statistical datas and investors behaviuor and mind set of investible community. Here we can fairly conclude that dist/ifa who strive more to reach the investible community and expand the horizone with thorough knoledge of market and products vs traditional products, Actual need of invetor and their financial resources are taken in to consideration. Ultimately dist/ifa has to update with regulations and tecnologically update then only industry grow faster accordingly our contrys economic growthtoo. The direct plans are success full in some specific areas like metros and knoledgeable investors who can go for direct plans.Our population is majorly in villages where more money is available but it is deployed in some traditional instruments like bank/post etc.In my veiw all IFAs will join hands to create this success story of our country.

Great Thought!! Good for the future of MF Industry.

Well said Mr.Nilesh Kamekar.

Charlie Munger is fond of saying, "Show me the incentive and I will show you the outcome." He also says The iron rule of nature is: you get what you reward for. If you want ants to come, you put sugar on the floor.” But we simply refuse to learn this basic lesson. We want ants to come by removing sugar from the floor. Nice.

Dear Ashish Awesome articulation of Very relevant topic in current environment all industry participants are talking about distribution expansion now the time has come to act . Banking correspondent model for Jan Dhan yoojma also is also case in This direction where large numbers of Intermediaries could be incubated. Like to add on Technology platform to your perspective this platform can help in servicing and scale thinking in this expansion Model

I agree with Mr Sam Koshy. The need of the hour is a higher trail only structure which surely stop all churning. IFAs be honest to the Investors, if so the investors will surely come into MFs. The potential new entrants should see how the existing IFAs survives. Talent pool is a nice idea but to attract the new entrants we need the existing IFAs to stay long and survive, if not, how a successful talent pool is created ?

I am in this activity for over a decade and my observation is barring a very few AMCs (the numbers u can count with fingers in one hand and will still have a few left) no one else sees beyond six months ahead. This tiny industry appears to be the most regulated - invariably the regulatory measures come after the horses have bolted. Unfortunately neither the regulator or the manufacturer or their association (AMFI) is able to think in terms of long term road map for this industry and put in place a stable policy that will not change for 5 to 10 years. No one is able to take on the bank distribution channels who probably are the single important cause for the current state of affairs. Unless this profession has stable future and growth prospect any amount of effort will remain futile. I may sound very pessimistic. unfortunately in my opinion this seems to be the state of affairs.

Good idea. However as you mentioned "If none of this happens and they go away to jobs outside our industry, we would anyway have created brand ambassadors for our products, who can spread awareness about mutual funds among their friends circle and in their place of work" Please note that trained MBAs or graduates spread the awareness of mutual funds among their friends circle only to invest direct and not through IFAs.

I think in next five years, there will be positive growth in number of IFAs active in the industry. Mr. Ashish and Mr. Manish has raised very valid points. let us hope the things will be more promising in time to come.

I fully agree with Mr Sam koshy. In an environment wherein IFAs with AUM of 5 CR and less are not even paid 0.5 trail inclusive of service tax, how can one expect the new generation to join this business. With so many uncertainities regarding future income, one would prefer to pick a job which is progressive and certainly Mutual Fund distribution is not one of these.

It is true that all AMCs require empanelment & they dont want to pay commission. Presently what we get is not commission. Majority of amount paid to us as commission, is charged to TER as distribution expenses. How AMCs can charge commission to TER without any consent from investors? Commission should be paid from AMC account to solve all questions. Entry of separate head of distribution expenses has not only made corporate & HNIs happy. (Majority of Investors has not benefited from it) but also slowed down the process of new empanelment. Senior member from authorities has many time indicated 100% removal of commission in future. The difference in TER of both d plans is against basic rights of distributors.In this scenario why new (Highly Educated) generation will come for empanelment?

wonderful idea to talent pool to improve mutual fund industries business in future. At the same time improve the talent of existing IFAs by giving periodical training by the AMCs. Improved technology and the direct sales make the IFA s life more misserable in addition to the reduced commissions. technology, advertisement or direct sales doesnt improve much to the penetration. Hence, improvement of,the skills of the IFA, I feel, will be helpful to the mf industry in long and short run.

Thank you,DFDA, I am sharing my experience in this regard,in 2014 summer I have initiated & took some students from local colleges & trained them for 2 months in my office,help them to clear AMFI certification,they cleared the same.But due to lack of support system , I am unable to continue the process.

It is really a wonderful idea to get the talented work force of distributors to increase the penetration of mutual fund selling business to the length and breadth of this country. But will you(AMCs and regulators) please answer and address the grievances of those who are in this business since long. (a) Uncertainties of remuneration (b) Frequent change of rule of RIA etc

Very nice idea and approach to create a talent pool. Distribution and IFA business is surely going to grow with ideas like these in the future. Must be implemented.

If the survival of the existing IFAs is made difficult by creating an environment(low trail of around 0.5%) where in even an IFA with a Rs.3 crore AUM lets his/her code lapse, how would the industry attract new talent? Benefits of the lapsed code AUMs accruing to fund houses is the main culprit in all this. Lapsing codes with lower trail commissions of around 0.5% has become a business model of sorts and hence the resistance to pay a higher trail of around 1.0%.

All talk and no honest action on commissions i.e. no increase in commission over the past 3 years is only helping lapse codes of IFAs further. The 0.8% trail suggested in the above article means an after service tax trail of around 0.68. But, that is what fund houses used to pay when there is an entry load and before SEBI introduced the 0.5% increase in expense ratio!So, in reality the income of IFAs is further squeezed to increase profits of the fund houses as the significant increase in profits of fund houses would indicate.

Wonderful idea. On implication, I believe, will be a value addition in the MF industry altogether along with creation of new milestone.

This is a good idea, provided the business parameters have some sense of stability. With commission so severely restricted and any revision in income only on the downside, it is difficult to implement the idea. If the IFAs earn less, they cannot pay much to their interns. If only trail income is the norm, IFA revenues will slow down in the short term. Add the challenges of technology and increasing direct sales. the picture then becomes unclear in terms of revenues. However, IFAs with a good amount of business, as things stand, could implement this activity.

a very nice idea indeed, a win win situation for all, the new MBAs get a good apprenticeship, AMCs get to spend their investor education and market expansion fund wisely and the distributors get good sales staff for business expansion and we get future IFAs and well trained MF staff to help expand the business to new horizons .. but only if the AMCs take this seriously and work in right earnest and not look for short term gains.

Yes. An idea whose time has come.

Xcellent effort. Hope MF industry will implement it. All d best.

Great idea. As rightly said: "There is nothing to lose and a lot to gain from this initiative."

Appreciate your efforts DFDA Team. Very Good suggestions. Hope its implemented. My elder daughter doing her MBA is doing on Mutual Funds only.

Low remuneration will not attract anybody.