All this manipulation of the system is happening because there is no segregation of what need to be paid to an advisor from expense in only trail. Hope regulator bans upfront in all formats (including B-15) and segregates what needs to be paid to an advisor from the expense for the sake of investors, IFAs and the industry.

FEE BASED DISTRIBUTION IS NOT POSSIBLE IN SMALL CITIES IN INDIA RETAIL INVESTORS EVEN DONT KNOW ABOUT WHAT IS MUTUAL FUND AND HOW ITS WORKS ALL THEY KNOW ABOUT MUTUAL FUND IS "MUTUAL FUNDS ARE SUBJECTED TO MARKET RISK" THEY DONT EVEN WANT TO UNDERSTAND WHAT IS MARKET RISK BANKS EMPLOYEE AND BANKS ARE THE ACTUAL BENEFICIARIES OF MUTUAL FUND INDUSTRY THEY GET INVESTORS VERY EASILY SEBI SHOULD LOOK IN THIS POINT ALSO

quntam team do lots of activity &try to promat direct plan but still quntam is a small fundhouse & investor dont know them not a biger aum .

is it the ssame penetration level maintained in india?what is the percentage?SEBI and AMFI have done enough for retail participation.Where the is logic behind?Is it any indian upto the markCSA?Why SEBI crush the IFA"s?Where is the skill india?

First they hated and banned entry load and upfront.Then they justified trail.Now they hate even trail and justify fee model. I have never seen" Govt bodies" thinking so minutely on any issue in India on any sector since last 20 to 30 years.Then question arises who is behind all this thought process?.Already IFAs are justifying the trail by closely association with their families and helping in all issues.What more is needed.nobody is raising issues.Frequent discussions on client portfolios lead to more churning.More over these new so called service standards will need hifi software tools to impress and show off service standards to clients.Money will be just siphoned to different section of business.Investors will not benefited too much.Present system is quite enough to satisfy the investors Client himself abodons the advisor if he sees any discripancy in service.Copying of canada and uk system is not original research.

Agree with Canadian regulator’s observation that Advisory is more about managing psychology and is the toughest part. Also agree that just submitting the applications doesn’t deserve the commissions that are being paid now. When compared to IFAs, how many banks, NDs and online platforms, robo-advisors are giving better service in the area of ‘Psychology management’? Aren’t banks, NDs, online platforms, Robo-advisors Transact only distributors? If Trail commission should belong to advice and continuous service then why are these big Transact only distributors being paid Trail in the first place? Worse still, why are these big Transact only distributors being paid far higher commissions than average IFA who is better at ‘Psychology management’ ?

Many IFAs have been asking for only trail and asking for a ban on upfront commissions for a long time now. But, upfront commissions are persisted with for banks, NDs, online platforms and some Big IFAs. How many of us know that a B-15 incentive of 5-7 % or even more in upfront format is being paid to the above big distributors attracting adverse attention of the regulator? Why should B-15 incentive be paid in upfront? If B-15 incentive is paid in only trail, a minimum trail of 1.75 % or even more can be paid in B-15 locations. As usual, IFAs are being short changed by tempting with upfront B-15. Upfront in all forms including B-15 incentive should be banned.

’Trail commissions are anti-investor’ is a logically flawed argument in India for the simple fact that the client has the option to go for ‘Direct’ if he / she is not happy with the service of an advisor. If there is any conflict of interest in Trail that is because different AMCs offer different Trail commissions. Trail should be made same across AMCs and should be separated from Expense ratio to eliminate any residual conflict in Trail commissions.

Very interesting Needs deep study. May the powers that be apply their mind without prejudice, Good effort.

Though it is good article highlighting recent developments and making IFAs think whether trail commissions they receive justify their service to the investor. But extremely disappointed with the heading of the article. Infact, heading is anti-IFA. Requesting you to make sure your heading voices the content of the article. There should have been question mark at the end of the heading " Trail commissions are anti-investor?"

i dont understand why we are always comparing india with western countries. what is the penetration of indians in mutual funds. its ridiculiuos sometimes to compare without knowing ground realty. we need certain things and measures to incresase the participation of people in the markets. it seems people are more intersted to copy and paste formula. prepare ground for the regulations first...

Too much of analysis is paralysis for any developing industry ... Indian picture is totally different from Canada ... Its not that with trail the MF industry is not growing and the regulator alongwith the MFs should remember the contribution of the distributor class in the growth of the industry ... Sometimes I doubt the capability of the fund managers if they cannot generate the amount that they are paying out as trail or is it that they also wait for FII inflows like any retail investors to generate gain in his/her portfolio !!

The Headline of the artical some how pinch as IFAs already struggling for survival. The trail already capped by regulator and its 1%. However if I read between the lines in above artical it gives a superb thought for SEBI to think on its policy. The Large Distributors & banks, They have bigger pie of the business and yet they dont put effort to review or provide advice to the existing clients and still they are enjoying Trail Benefits. The Distributor who are really putting theier high end effort to increase clients setisfaction by providing quality service should be benefit more on Trail ... Sebi must think on this thought suggest by Vijay.

Each country is different. we just cannot follow blindly to europe or us/ canada. According to me trail is just to run our organisation. As amc are doing business from their office, we IFA also have many recurring expenses including staff cost and office cost also. whatever investor invest, a certain portion is allocated towards expenses. There is already a direct plan to DIY category investors. In a 125 crore plus populated country, hardly few invest in mutual funds. so penetration is necessary. where a sales person is only require to enter the market.

Thanks Vijay for keeping us posted on global thought process on this topic. IFAs will have to come up with solutions for problems of many investors not being aware of trail & more importantly they not having any control on the quantum of trail. Point about service not being guaranteed by IFA in lieu of his trail earnings is also well taken. BUT regulator would have to face reality of IFAs going away from this profession if fees are to be collected from client. Also it would be challenge to charge fees for "hand holding" as opposed to product selection and portfolio performance.