Who planned close ended funds?? Who gave sanctions to such funds?? Who announced high commissions to sell such funds??? If high commissions are like bribes to mis-sell the close ended funds, AMCs are responsible for it. why AMFI is killing us???

To bring a new customer in mutual fund industry, it takes lot of counselling and repeated meetings to suffice with data and performance. Sadly, regulator does not bother about the investor education done by the distributor and to make this effort on a continuous basis inspite of needless negative news. On top of that, reducing commissions and levying service tax etc... will be practically very difficult for a retail IFA to concentrate only on MF business. Hope the regulator releases funds separately for distributors who brings in NEW KYC in a financial/calendar year to boost his morale and to continue look at MF business option as a economically viable business option in the long run.

There is so much hue & cry about capping commisions and reentry of sevice tax that even the clients have started taking deep interest regarding the outcome.The local dailies have printed that it will cost you more if you buy thru agents of mfs and the investors have started exploring alternate ways.Besides taking frequent changes both AMFI & SEBI create a lot of confusion to not only advisors but also to investors. I thought the industry had evolved itself but it seems to be making too much noises every year. They should find ways to settle for once and all and stop giving us sleepless nights.

Very much agreed with wealthforume.All trail model is the best and some upfront should be there is SIP and ELSS if agreed by distributor otherwise there too all trail model should be allowed if distributor wants.SEBI and AMFI should see that small IFAs are not thrown out of the industry.Already service tax issue has done serious damage to the morale of the distributors having sleepless nights and waiting the final outcome of the episode.Look at IRDA,it recoginses that insurance is a difficult product to sell and it has been talking of increasing the commission from present 35 % or so.in first year and 5.00 % or so in other years.I am sure this type of things will lead to mi selling more instead of just putting one MF INDUSTRY behind the bars for all kind of mis selling.Let the finance ministry really do some impartial honest intropection and thinging and frame rules which promote all industries.Let us hope so.

I dont understand that whether the issue is high commission or mis-selling? Is only high commission leads to mis-selling? Are you sure that commission cap will result to right selling? We need to introspect and if high commission is cause then we need to take actions with all financial products which includes insurances. I forecast that commission cap will increase mis-selling as now the Agent will not sell beautiful product like MF and will sell insurance showing its benifits. Further are you sure that commission cap will reduce the mis-selling i have serious doubts about the same. The best thing to do is prove the mis-selling and bare the person from selling the financial products and it should be applicable to all the financial instruments. With this circular of Best Practices only AMCs are going to be benifitted as their profitability is increasing and that manufacturer would always like to do under the pretext of Mis-selling!!! Work on the core issue and not around it!!

I very much agree with Jayant from Dehradun. The misdeeds of AMCs who brought out so many close ended plans have backfired. Why did we need these plethora of New schemes ? An all trail model is the best. Also AMCs must incentivise distributors for bringing in Fresh Clients, as getting a new Client is the hardest part for any distributor.

after all the discussions, it appears that the best model will be ALL-TRAIL model. However, in order to keep the ELSS and SIP market alive, there can be some incentives.

distributor is killed by service tax,capon upfront.now they are doing postmartem and it will be reviewd after three month? you can see the skeliton.my suggestion is abolish all type of commns go for direct plans.

The idea of capping upfront and trail is incorrect. Even the cap on expenses is also incorrect. In a free market economy seller should be free to ask any price. The buyer has the freedom of not buying a high priced product. Mutual funds are not essential items like food or medicine.

The spate of close ended funds exhibited the greed of AMCs and distributors, often causing me to wonder if this also satisfied the greed of members of SEBI. If not, how can one explain the sanction given to a succession of almost identical close ended funds. It has been a classic case of killing the goose. Now that the goose is dead, I am sure that the process would have started of creating another golden egg laying goose, because who can fight against market forces and greed. On the other hand, in spite of so called high commissions, if one were to take NAV based returns of equity mutual funds over a 10 year period, they would comfortably beat almost every other asset class. Even in many cases returns generated by real estate. I do not know what the solution is and I am sure the wise men at AMFI are even more clueless. That could be the only explanation why they keep shooting in the dark. I just hope that one of those bullets does not kill a healthy mutual fund industry.

Trail only model is the way forward as correctly projected and sip & elss should be incentivised. This will encourage thrift and draw investors to equity and elss may make some remain invested longer.

1. I love the new rules, in 5 years we will become bigger, as fresh competition will be wiped out, hopefully banks will sell ULIPs and I will retire in peace. 2. Vijay - you called the all trail well many years in advance. 3 Good Commanding officer, good regiment - period its an axiom - I am fed up of being treated like a crook- these articles on mis selling appear in media , our clients have made across the board double digit tax free returns thanks to amc-s running funds spectacularly well, over the decades, after that this plethora of NFOS which AMCs conjure up with amazing regularity, one has to reach out to the thesaurus to see the innovations, brings small time agents of mf like me a bad name.compliance kicks in regularly - bad karma of needlessly high brokerage as CEOs chase market share, wish we would be left alone in peace , I pray that a distinction is made between banks and small time agents likeus and we are left alone.