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I would prefer upfront commission and trail. The problems mentioned by many in the discussion should be solved by implementing other majors like reversing the decision of direct plans/banning banks from selling mutual funds. I would suggest all IFAs to come together and form a National Distribution company and implement the suggestions so far given by them to the regulators and the AMCs.

Dear All Fund Managers, we request your support in this regard. Are you supporting unscrupulous elements to churn the hard earned money or are you supporting a ban on all upfront commissions and supporting a higher trail only model ? Further, Requesting all MF Industry related personalities to comment. With all your strong support we all expect the "Tiger to be on the Prowl" soon.

One of the reasons large monies are not coming into the mutual fund industry is because investors have not experienced big returns. Though there are many schemes which have given fantastic returns in any asset class be it debt or equity, the "Tiger has not tasted blood". The biggest reason why he has not tasted the returns is because of large churning of the portfolio by the distributor. If the trail model of brokerage payment is implemented across the board for all AMC''s and schemes, then there is virtually no incentive to churn the portfolio. Even the fund houses can go about doing their job of managing the money much more efficiently without worrying about the churn. It is in the interest of the industry to go on a complete trail model.

I support banning of upfront and introduce full trail model across the mutual fund industry.

As long as upfront commissions are there fund houses may pursue direct share class aggressively so that whatever commissions that are saved may be paid to big distributors as higher upfront commissions. With direct share class hanging like a sword on our neck getting a ban on upfront commissions is the only way we can survive in the longer run.

it is proved time and again that mis-selling happen with Banks and NDs because of the simple reason that RMs are not given credit for trail and they need to churn assets to get upfront commission. Also banks pressure their clients who are vulnerable. hence, it is high time that Banks are banned from distributing third party products and also uinform trail only model is introduced.

NDs are into the MF business only because of Upfront commission. . SEBI may look at the share of both NDs and IFAs in terms of AUMs, folios and presence in locations . As long as they enjoy the major holding it is tough to go against.

The bigger issue is Investor awareness. The policies and regulators might be able to track churning within funds or within MF industry etc. But the distributors are selling all types of products. So unless there are mechanisms in place to take care of misselling across products all this may not help. The focus has to shift to Financial Planning for which though SEBI came out with regulations nothing much has happened post that. Neith fund houses nor distributors have done anything beyond that. RBI is yet to come out with its guidelines for banks who are the biggest distributors of MF.

I THINKS SEBI HAS TO DO SIMILAR RULES FOR ALL DISTRIBUTORS.

Being an ex banker, I would totally agree with Mr Koshy. Banks encourage churning as wealth managers are not given any credit for trail income and are tracked only on upfront commission. Which is why client always a loser. Hope SEBI wakes up to this reality and takes necessary steps to stop this malpractice in the industry.

ITS GOOD TO FRAME UNIQUE RULE FOR ALL. BUT IT IS POWER OF MONEY THAT DECIDE. BUT FOR MF- A VEHICLE FOR SMALL INVESTORS TO GAIN IN MARKET. SEBI MUST DO A GOOD JOB IN CREATING HEALTHY ENVIRONMENT INSTEAD OF FRAMING RIDICULOUS RULES/POLICIES EVERYDAY FOR DISTRIBUTORS/IFA

Great injustice being done to I FA''S. This type practices must be stopped by the fund houses and give I FA''S give at par with them or increase the trail commissions.

Must ban upfront.

In absence of entry load, any upfront commission is injurious to the health of MF Industry

All trail model best for IFAs

All upfront commissions must be banned and there should be parity and transparancy in commissons to all distributors

it is very bad for geninue long term investor sebi must be ban on upfront

only train model is the best for IFA

In the current market scene small IFA''s can not maintain theirself. they are forced to became a sub distributor. A very big difference in payout of upfront between Big distributors and small distributors. IF upfront may be paid higher to small distributors for remain in market and trial should be equal. some big distributors dont use concepts of mutual fund they only focus on selling. Because mutual fund main aim is long term investment. so either higher upfront to small ifa''s and lower paid to big distributors or stop upfront and only TRAIL may be applied for entrance of new IFAS otherwise new IFAs can not stand in this market.

If very low % of clients withdraw the money before one year, it is not a big problem. It is not a big concern if 4%-5% clients withdraw in early stage & our income is reduced in those folios, due to uniform annual rate of commission. But if very higher % of clients are withdrawing in early stage, then something is wrong somewhere. In that situation our duty is to convince those clients to remain invested. If some clients are investing in equity funds with a small horizon, we should advice them that it is not a suitable product for small horizon.

Dear Friends, The question that we need to ask ourselves is how many of our clients are withdrawing in the first 3 months? Even if someone takes upfront commissions that will be clawed back anyway if the investment is withdrawn within 1 year, so what is the advantage of having upfront commission? We will be giving a chance to unscrupulous elements to churn if we allow upfront commissions to persist and the investors will never trust mutual funds as long as upfront commissions are there.

ban of upfront commission will not yield any solution for mis selling.Even upfront commission for ongoing schemes are negligible. I observed that many of the distributors particularly IFAs are recommending ban on upfront commission and suggesting higher trail commission.Now let us see the situation that one investor who invested lump sum of Rs.200000/- in a good scheme as suggested by IFAs and conceded for trail only commission but because of some urgent need the investor withdraws the money after 3 months then how the IFA will get the trial commission over the year??. It means that his effort to advise an investor to invest in a good scheme go waste without any remuneration.This is not practical.

ONLY TRAIL MODEL IS BEST OPTION.

To kill direct plan , upfront commission must be eliminated from the industry and only trail model should exists.

RETAIL DISTIBUTRE ARE UNABLE EARN TO MAINTAIN OWN AS ADVISOR.THERE IS FREE TIPS&ADVICE BY MEDIA,CORPORATE VERY POPULAR IN OUR SOCIETY.SO INDIVISUALS ARE NOT INTERESTED ABOUT THIS PRPFESSION.TODAYS FINANCIAL MARKET ENVIOMENT IS NOT ATTRECT SMALL INVESTER.SMALL IFAs ARE MAINTAINING THEMSELVES AS LIKE BAGER.

this type of suggetion & discussion shouild contnue

Dear All, AMCs are the ones who can give the best answer to Mr Ravi Krishnan''s question(this is every IFAs'' doubt too). Requesting all AMCs to give their best answer through this forum.

Upfront commission already banned by SEBI. But AMCs are using two letter words called SPECIAL INCENTIVES for B-15 and has been legalised by SEBI. It is none other than upfront commission. SEBI must ban this so called upfront commission and make trail mandatory. In lieu of upfront, IFAs should be offered with ONLY HIGHER TRAIL MODEL on the basis of their performances. But my billion dollar question is why top level AMCs are hesitating to release ONLY TRAIL MODEL???

I take this opportunity to present a clear example of the high commissions being paid to big distributors. THE DIFF IN THE NAV OF DIRECT & NON DIRECT PLANS SHOULD NORMALLY BE THE DISTRIBUTORS COMMISSION (UPFRONT & TRAIL). THE MAXIMUM COMMISSION I KNOW IN AN OPEN ENDED FUND IS ABOUT 2.5 - 3%. THEN HOW CAN THE DIFFERENCE IN NAV OF CERTAILN SCHEMES LIKE RELIANCE MEDIA & ENTERTAINMENT BE MORE THAN 10%. I TRIED TO GET A CARIFICATION FROM THE AMCS BUT THEY ARE DONT HAVE A PROPER ANSWER TO THIS. I WISH THE REGULATORS TAKE A NOTE OF SUCH ACTS.........

I am not selling close end scheme because trial commsion not paying

I request Govt.& Sebi to impose a total ban of all entry commissions. This will surely reduce unsolicited regular switching ins and outs for initial commissions. I request to not re-introduce entry loads. The distributors are getting enough percentage for MF service now. Why should investors lose again and again.

Upfront commissions should be banned. SEBI and AMFI should take proper action in this regard. Otherwise scam like chrning will be keep on happening.

upfront commissions should be banned so that mis selling stops Give Business to those who pay only trial.

I support Kindly ban upfront and begin trail model.

In the past luring of AGENTS has been made by many AMC’c to mobilize funds during launching of NFO’s by offering higher brokerage and OR foreign tours along with spouse. This resulted in reducing investable amount in the respective funds hence NAV’s Now AMC’s are giving higher upfront brokerage which is charged to the fund. Though the AMC’s are not violating the mandatory rule of eliminating ENTRY LOAD, the payoff’s are made thru administrative expenses which affects the loyal investors. Trail only mode helps both investors who are real owners of funds as well to ADVISERS who build the industry on a LONG RUN. Some AMC''s like Franklin are following trail only for brokerage which is appreciable. Now Motilal Oswal are also following the same as said by Mr Somaiyaa of Mubai on 5th Dec 2013

One should congratulate Mr Koshy for starting a discussion thread that has lasted over a month. Without doing any survey I learnt that all IFA friends like a trail only model. You will be happy to note that Motilal Oswal AMC has equity funds which are NO LOAD and they offer trail commission only. The first such fund Motilal Oswal Focus 25 Fund launched in May 2013 has crossed Rs 100 crs AuM within a period under 6 months without paying any upfront and by propagating trail only.

I agree that the upfront is the root of all evil here but a bigger question is why there is no direct in stock markets le BSE/NSE/MCX/NCDEX etc. SEBI has become a muppet of some high handed people. hahahaha......

Shootout upfront thenonly IFA''s will survie

upfront commissions should be banned so that mis selling stops

I also agree that Upfront commission must be banned totally & all Honest IFAs must boycott Close Ended Funds.

i fully agree and support the movement .BAN....BAN....BAN...UP FRONT COMMISSION AND BOYCOTT CLOSE ENDED FUNDS

I suggest let''s encourage the AMCs, which have Only Trail model. I believe we have Franklin, IDFC etc in this way.so, if we start encouraging these AMCs, others also will follow. Please share your opinions.

Ban up front and shift towards Trail model

One has to think of any element in life on a long run destination be it financial matter / relationship / any thing else. It is not on only today''s status one has to get satisfied. A small element followed by ANTS / Bees which are small creatures in Nature is worth for human beings too for ever. Let us have Trail Only commission & increase the contribution of IFA''s to the industry

As always I support full trial model. Pl. ban upfront commission.

Please ban upfront commission & enhance the tariling commission proportionately. Thank you, Madhusudan I. Mistry ARN : 36559

Fully agreed. Anyone can be SRO including FIAI. But , Fix an only Trail Model First, remove different kinds of upfront brokerage incentives and then consider giving anyone for Self Regulatory Status. That can ensure a 75 percentage fair treatment to total distributors.

Honestly i could not understand the term SRO and FIAI but what i could understand is that about trail only or upfront for first year with or without trail. I am of strong opinion that upfront should go immediately and even trail should be given after three months in Equity funds to stop all non sense going on. One IFA in Jalandhar paid around 1 lakh to my client and switch my 2 crore AUM. I have nothing to proof but i know from my sources.

We have read enough about the functioning of big distributors like banks etc who are churning the funds for upfront commissions. The result is either dwindling of funds in many cases OR not a good returns OR not bothered about the assets of the investors. The freshly appointed MBA graduates etc get their increments / promotions and are shifted / transferred to a new place. These persons are not available for any check-up by the investors. An adviser remains at the same place and has accountability for the work. In the interest of adviser also TRAIL ONLY type of paying the brokerage is best.

I suppost this , i will there should only be trail model .

I support trail only module for fare business practice in MF insustry. Abolish all forms of upfront commission to clean the mutual fund industry. Trial only model brings quality advise. It also make the AMC as well as the IFA more responsible in bringing out the best in long term. Why SEBI is taking so much pain in issuing show cause notice to BANKS and other entities for churning investors money. Here bank is not only responsible for churning investors money, but also AMCs are also equally responsible for, because they are paying UPFRONT comission. That is the reason this is happening. In one hand no one can clap. The best option is SEBI should pass RULE/STRICT INSTRUCTION to all AMCs to follow only TRAIL model to all MF distributors to STOP CHURNING. It will reduce SEBI''s work load also.

Abolish all forms of upfront commission /pay back/ gift etc. to clean the mutual fund industry. Trial only model brings quality advise. It also make the AMC as well as the IFA more responsible in bringing out the best in long term,.

I SUPPORT TRAI ONLY MODULE FOR FARE BUSINESS PRACTICE IN MF INDUSTRY

dear sir, do you have any proof for churning in my experience lots mutual funds agents selling this products with out proper knowledge technology and training I think these banks & ND are using new generation advisory systems they are well educated & they can give proper advise to their clients please refer CFP holders advise , family office concepts , wealth managers style of advising please try to stop all commissions & start Fee based advises ASAP

Trail is the only sustainable option

Yes trail only model is the only answer.

Yes, even I support trail only model being an IFA. Let us join and work to bring out trail only model for all the IFAs in the MF industry. IFAs provide personalized service to investors, which a broker or a distribution channel cannot do. The broker or a distribution channel might be offered a high payout in order to make the people invest in mutual funds of selected AMCs only. I will support you.

I strongly support trail only model.

In no way I am going to accept the dominance of a big distributor by working under him as a sub-broker and loosing my self respect. This is all because of the faulty policy made by the governing body of the mutual funds. They are unable to understand the pain and difficulties, faced by the IFAs. If IFAs are not there .i.e. if they leave the industry, I firmly believe that MUTUAL FUND INDUSTRY will meet a very painful death. To understand the difficulties being faced by the IFAs, these officials will have to come out of their offices and talk to them, else the name of the MUTUAL FUND INDUSTRY will remain only on paper.

As long as upfront commissions / pass backs exist big distributors may be killing small distributors slowly. Let us ask for a ban on upfront commissions and ask for transparency in payment of commissions. Introducing the full trail model for all the players ( IFAs, NDs and banks) Is the only best solutions for all these evils.

Hi , I am refering to the mail , in which edelweiss is offering 500Rs worth flip cart gift voucher! This is a classic case of pass back , and luring / bribing the investor in to some investment. I am shoked to see that this is from a reputed institution like Edelweiss.I wish that they will review this and withdraw it immediately. Its a clear cut case , when some one has access to personal information of the investors , they can lure in to bad financial decissons by offering gifts and pass backs. It also a no brainer , to understand that these spurious acts are financed by the upfront commissions( I leave the rest of ill effects of these things , and their back ground to the comprehension of the big wigs). Hence , I earnestly appeal to SEBI and other regulatories in charge , to ban the upfront commissions.

dear sir, very often i get your mails,comments on present situation,this keep me intouch with thing happaning otherwise present is so boring. too many norms has killed our financial growth story & till change of guard at PM,FM donot expect anything,all is trial n error as if we are rats in their labs.donot expect any help from these,more than 75% ifa''s are out,off the scene,no light near future

Any entity formed as SRO must have representation of IFAs also.

Friends, here is yet another way of offering pass back "Flipkart gift voucher of Rs.500/-". Edelweiss recently sent a mail to its clients offering this voucher and urging them to invest in Tax based Mutual Funds without any transaction charges. Is it fair ?How can an honest distributor survive with the upfront commissions that allow pass backs? As long as upfront commissions are not banned small distributors will not survive.

Recently I received a mail from Edelweiss urging to invest in Tax saving mutual funds and get "Flipkart gift voucher of Rs.500/-". Isn''t it a "pass back"? Isn''t it illegal? How can a distributor who is honest compete with these dis-honest practices? Aren''t upfront commissions root cause for all these dis-honest practices and there by killing IFAs from the industry?

FIAI has never requested ban on higher payout in first year. Directly or indirectly brokerage structures (paying higher payout in first year) are misused to increase annual income without doing any new business by way of churning the existing assets. In the end this is paid by our clients. Major share of distribution expenses is taken away by distributors having lower life. In other words distribution expenses are higher because of churning or AMC profit is reduced. Due to this situation regulator is not happy with the industry. If Regulator makes it compulsory for AMCs & AMFI to disclose Average life in each category of assets of each & every distributor it will help in discouraging churning. Ranking or rating can be given (based on their performance & life of assets) to distributors to identify churning activity.

I totally support Mr. Sam Koshy''s views. Everybody is aware that current mistrust amongst the small investors towards MF industry can be attributed to the mis-selling by Banks and NDs. It is very unfortunate that SEBI who vouch for investor protection seems to be blissfully unaware who are the real culprits of the current mess. IFA''s are fighting against a very strong lobby of Banks and NDs which has very little interest in the investor or in real development of MF industry, they only have narrow self interest of earning big fat profits at the expense of hapless ignorant investor by mis-selling and unnecessary churning of his portfolio. It is unfortunate that AMC are also not supporting IFAs who are actually subsidising their income so that higher Upfront fees are passed on the Banks and NDs. In interest of MF industry, IFAs (who have mobilised retail investors & usually have sticky moneys with the funds) should be encouraged as they provide stability and are truly concerned about the investors. For IFAs long term relationship with investor is far more important than the short term interest which the Banks and NDs follow.

Recently, Moneylife came up with the news that SEBI issued a show cause notice to HSBC for churning investors money. We have to see it in this context. Banks& National Distributors are trying their best to make sure that upfront commissions will not be banned. High Volumes coming from Banks & NDs. They churn investors hard earned money regularly for high upfront commissions. If upfront commissions are banned and trail becomes only source of income then in-equalities in commission payment will be reduced and it is good for the industry. Without banning upfront commissions whatever be the structure created(whether it is SRO or something else), it will further deteriorate the industry’s condition as it will eat in to whatever little confidence that investors have in Mutual Funds.

Yes , I agree that if the SRO status is given to Banks and Big brokers they will implement the procedures and rules of their interest without bothering for independent IFA. They will protect them from complaints they have from the customers. They also will form the procedure to protect their brokerage and will not allow IFAs to come directly to their competition. It would be more appropriate for SEBi and AMCs to provide facility and support to IFAs so that they may directly compete with these big players and earn their share in their respective areas. Although the banks & big players are getting more business for AMCs from their HNI and NRI client base but the fact is that only IFAs have more reach to the small investors and time to explain & monitor their customer portfolios. They can increase market share due to deep penetration. Moreover, IFAs are directly responsible and answerable to their customers in comparison to Banks and big players who get away easily by blaming customer and their ex-employee or ex-agent who mis-represented the facts. Only the reason for IFAs unable to compete with big players is their financial in-viability in terms of infrastructure and support. In this area IFAs need complete support from AMcs and SEBi to cut IFAs cost and give more brokerage to small operators to encourage them and support MF industry. I hope IFAs having leading management committee should protect them from further victimized by any such implementation by SEBI , AMFI or AMCs. Rgds L K Manocha

I don''t agree with Mr Gurpreet Singh of Mumbai that FIAI is taking care of IFAs too. If it is so, why it has not taken the issue of Trail only model till date which is the only solution to many unethical practices in MF Industry, Why it has not raised voice against Non Transparency in Commission structure of various entities? All these facts strongly recommend that FIAI is working as a biased body & it must never be given SRO Status.

I totally agree with your views. There must be transparency, consistency and equal commission rate to every IFA.

As long as upfront commissions exist, whatever be the association or federation or SRO and whoever heads it there will always be a conflict of interest with big distributors generally going for upfront commissions (and needless to say trail only model is best for small distributors). It is quite easy to guess who would win if the interests of the powerful and the mighty come in direct conflict with the interests of small distributors. Despite their low cost structure thousand of small distributors leaving the business over the past five troubling years from the the industry is an indication of the harm that upfront commissions are causing to the industry. Had there been a minimum of 1% trail even a distributor with 2-3 crore AUM would have survived.

Also ARN renewal has become much costlier. I have to shell out 2000+1500=3500. Is this justified ? If IFAs are valuable to AMCs, why not AMCs pay this amount on our behalf ?

Dear Mr. Gurpreet, Do you and FIAI support and stand for ONLY TRAIL MODEL or UPFRONT + TRAIL????? We IFAs wait for your clear cut answer........

Dear Friends, please note FIAI is a trade body not only for NDs & Banks. There are IFA Associations which are already part of it and few who have supported FIAI in their SRO application to SEBI. only one bank as a member out of the 17 members. FIAI has board seats planned for IFA Associations. Currently, we have atleast two more IFA associations are likely to join us soon. There is no question of it being biased or taking up any issues pertaining to any particular segment. The kind of issues we have taken up with regulators include sorting out issues in EUIN, ARN, KYC, New cadre of Distributors, Exchange platform, operational issues in Direct plans, SIPs which were taken up based on feedback from all distribution segments. We also assure you that there are no discussions on pricing/models which FIAI tries to do us a trade body. Our role is to take up only collective, constructive and developmental issues which will benefit the entire Industry. IFAs are a core part of the Distribution Industry and FIAI has complete focus on this segment. FIAI is making all efforts to have IFA Associations as its members and through this forum we request you to join FIAI as an IFA Association to take up development & concerns jointly. FIAI is perhaps the only national body of Distributors which is representing all segments of Distribution today and all of us must unite to take up the cause & development of the MF Distribution Industry and at the same time have a bright future/career for all of us as Distributors. FIAI has applied for the MF Distributors'' SRO through OFD (Organization of Financial Distributors) as it feels the Distribution community understands and knows the ground level issues of Distributors and can help in providing useful insights & growth impetus for the Industry. Lets unite together as a Distribution community and support FIAI''s candidature through OFD for getting the SRO mandate from SEBI.

FULLY AGREE WITH CONCERNS EXPRESSED BY IFAS. SRO STATUS SHOULD NOT BE GIVEN TO FIAI.

I wonder is there any specific such move by SEBI. When did it come? Pls share the link. If at all such instance occurrno doubt we shall be gradually out of business. Let''s see what happens?

SWAYAM JAGO TABHI DESH JAGEGA. AAJ SABHI AGENCIES EVEN MUTUAL FUND AMC''S ARE CORRUPT, BECAUSE OF THAT THEY ARE NOT BANNING UPFRONT COMMISSION AND MAKING TRAIL COMMSSION UNIFORM FOR ALL CATEGORY OF ADVISORS EITHER SMALL OR LARGE. WHY? THESE ALL KNOW THEMSELVES. JAI HIND JAI BHARAT.

Fund houses in general have been promoting upfront commissions keeping their profitability in mind though upfront commissions are known to be detrimental to investors’ interest as they encourage churning. We all know that NDs are main culprits in churning. In fact, the low commissions paid to IFAs are due to high commissions paid to NDs(which in some cases are more than expense ratio). A lot of IFAs have already left the industry. If regulatory powers (similar to SEBI) are given to these NDs, even the surviving small distributors will be out of business and hence NDs should not be made SRO.

Banks, more specifically private sector banks, have information about their clients monies lying in various bank accounts. The functionaries use this information to nail the clients to derive benefits for their personal ends in the shape of incentives and for the banks in terms of business garnered. Despite instructions from RBI, this practice continues at the cost of investors. The most harmful exercise is the churning done for their personal benefits; this ultimately results in customers'' disillusionment from mutual funds; hence diminishing investor interest in the mutual fund industry.

Dear Anon, There are two important things! Corporates are let to govern themselves. So naturally , a certain number of scams like the NSEL , before that Sayam and so on.. seen the light of every alternate day. These kind of things bound to happen when there is conflict of interest. Secondly , obviously , no one here in the entire value chain is doing social work( every one is doing their respective task , and expecting a reward , let it be commission , or a fees or a fund management fees).It forms definitely a criterian for such decissions.There is no shying away from that. Please do appreciate that people here are demanding/asking for fair play. And nothing else, with due regard to the regulatories like SEBI and all others involved.

Dear Mr Gurdeet, What a tangled web we weave when we first practice to deceive. The evil that banks and unscrupulous NDs and the like do , lives after them. The institutional advisor and their mob have such scheming brains,Such shaping fantasies, that apprehend More than cool reason ever comprehends. The hapless investor caught in a pincer is a mute spectator. To award the '' fair player'' award to FIAI , is inimitable SEBI. None are as blind as those who refuse to see. Kudos to SEBI.

I totally support Mr Sam Koshy. FIAI, a trade body, must not be given the status of SRO. There will be a conflict of Interest.

I totally support and side, Mr. Sam Koshy''''s view.. SEBI is fully aware of what banks & NDs are doing... There are such so called distributors, who had mis-sold the products and land their clients in tight spot. Since the staff of the banks and Nd''s are not permanent ( temporary / transferred). They are the one who are spoiling our markets.. Main problem is trusts & belief from their clients, who think that bankers are professional and well educated guys and are far better than we IFAs... Time has arrived that SEBI has to initiate action rather than kneeling themselves before FIAI.

All people on this forum are distributors. Dont we think that when the opportunity to form an SRO of distributors has come up, it should be run by a distribution led body - may it be FIAI or whoever. Its quite amazing that distributors prefer to be regulated by AMCs but not by distributors'' body! Some people are writing about upfront and no upfront etc. Is that the criteria for determining this issue? If an SRO is formed, is it being formed to decide on your brokerage? Brokerage is a function of your agreement with the AMC not who runs the SRO! We need clarity of thinking please; otherwise we will only harm ourselves more.

FRIENDS. FIAI ALONE SHUD NOT BE GIVEN SRO STATUES...THYE WILL DEFINITELY FINISH THE IFA COMMUNITY AT EARLIEST POSSIBLE DATE. IFA ASSOCIATIONS SHUD HAVE REPRESENTATION IN SRO AND THAT TO WITH EQUAL RIGHT AND W''TAGE..WITH BRAINS OUT OF IFA COMMUNITY REPRESENTING THEIR CONCERNS....

There should be proper representation from all type of distributor community

The basic issue with almost all the associations / organizations that claim to represent / safeguard the interest of distributors is they "don''t discuss commissions". They never ask for transparency and consistency in the payment of commissions as if asking the question itself is a bad thing. Distributors run their families based on the commissions that they earn. If the “all important issue of commissions” is not discussed what is the point of having associations? How do they help small IFAs ?//////////////////////////////////////////////////////////////////////////////// TO THIS DAY, NO FUND HOUSE PUBLISHES ON ITS WEBSITE THE BASIS OF PAYMENT OF COMMISSION OR INCENTIVES TO AN INTERMEDIARY. If the basis is not known how can one be sure that he / she is being paid fairly? As the distributors are disclosing their commissions to investors anyway what is the need of such secrecy from fund houses? Isn''t there a chance that such secrecy could be detrimental for the investors as well? How can one call a system fair if it doesn’t give equal opportunity to compete?////////////////////////////////////////////////////////////////////// The best solution could be aligning the interests of these big distributors with that of smaller distributors as well as with that of investors i.e. by banning upfront commissions altogether and by bringing in transparency and consistency in payment of commissions. If that is done it will not make much of difference whether small distributor controls the SRO or a big distributor or the fund houses.The industry will move forward and grow in a better manner.

Already no. of IFA''s in the industry are shrinking.Anything done further should definitely be on the welfare of IFA''s as it is the need of the hour.I''m against this very move which would further worsen the situation.

We should diversify to meet the challenges like focusing in health insurance , Fd''s etc.

Let me throw some light on FIAI. Financial Intermediaries Association of India (FIAI) is the trade body of Distributors of all segments i.e. National Distributors, IFA Associations and Banks. It is a Non profit organisation i.e. Section 25 Company created for protecting the interest of Distributors and development of the Mutual Fund Industry. FIAI is not controlled or does not work for interest of any particular distributor, it takes up common issues only. FIAI''s punch line is ''Common Voice of the Distribution Industry''. All the work FIAI has been doing has been around resolving around very important distribution related issues, many such issues have been addressed by regulators and many are process of getting resolved. FIAI filed the SRO application through a separately promoted Section 25 company called ''Organization of Financial Distributors'' (OFD) to ensure that a Distribution body gets the mandate of running the SRO which knows the Distribution Industry pretty well at the ground level, has its skin in the game and development of the Industry w.r.t. Distribution Industry & significant increase in investor base as its main objective. Please note that FIAI''s motive is growth of the Industry and taking up issues of all segments of Distribution and no other points raised on entry load, trail have been discussed or intended. Happy to add more points.

All these days we suffered and are still suffering with an industry body keeping rules for us. This industry body did only a lip service to us and kept guard for the top AMCs. Now if SRO status is given to FIAI, the IFA will be dead as a dodo, over time. We now clearly know who calls the shots when commission structure is decided by AMCs. Whatever fair thinking is left now, will be totally smothered once an organization dominated by business houses is made SRO. As of now we are seeing the ill-effects of indiscriminate selling and churning,on the industry. If we should not lose at least this semblance of trust the customers have in MF industry''s fair play and transparency vis-a-vis other financial products, we should all unitedly request our regulator to be very very judicious before taking a final decision

I totally support Mr. Sam Koshy''s view.. SEBI is fully aware of what banks & NDs are doing... They are such so called distributors, who mis-sell the products and land their clients in tight spot. They are our biggest and number one competitors, who are spoiling our markets.. Main problem is trusts & belief from their clients, who think that bankers are professional and well educated guys and are fare better than we IFAs... Time has arrived that SEBI has to initiate action rather than kneeling themselves before FIAI.

FIAI must never be given SRO status. Its like Butchers are given the responsibility of protecting the animals. The persons responsible for most of the unethical selling & churning in MFs (which has shattered the trust of MF Investors in India) must not be given any Special Status. Everybody in MF Industry knows that the business procured by these Banks & NDs is not at all profitable for the industry as it is short lived & they enjoy higher Upfront & trail as compared to IFAs while business procured by IFAs is sticky & profitable for the industry. Upfront Commission must be banned totally for stopping unethical selling, illegal passbacks & illogical churning. Trail only model must be the only model of Brokerage as initiated by Franklin Templeton in the Industory giving 1% trail.

FIAI is not suited to become an SRO, because it would be something like wholesalers controlling the retail trade. FIAI says that they know what are the problems with the MF industry and are best placed to act on it. These guys did nothing all these years, leave alone protest, to help the IFA in any way, whether on the revenue end or in simplifying operational matters. If SEBI has any sincerity, the SRO should be one which has IFAs who are in business mainly on their own, not under these distributors. One reads inflated figures in the media about what IFAs supposedly earn, upto 2.25 % p.a., but there is nobody to question these lies, least of all FIAI. We need to tackle our issues outside the shadows of banks and NDs, otherwise we will see no progress for the industry.

Whether it is SEBI or FIAI, both are out to destabilise the working of IFAs. With our apeing the American systems which is predominentally is driven by Banks selling MF products, SEBI is ringing the knell for IFAs. We need a strong lobby to prevent this.

My ARN NUMBER 0242 is indicative of my very long association as Distributor with the industry From the happenings of he past , one is bound to believe that SEBI ,Big Distributors, and AMCs are interested to see the small distributors (who contribute more than 50% of AUM on all India basis) get out of industry. Keeping in view this approach, SEBI is helping AMCs and Big Distibutors, by THINKING to APPOINTINT BIG DISTRIBUTORS AS SRO, to command small distributors. Thus they will be having more bargaining power to receive more upfront commission against the interest of small distributors. Due to the changes on commission structure, and change in policies in the past by SEBI, relating to small distributors, my interest in the business has been gradually reducing. Reason being particularly that it is very difficult to get fees for the services rendered to the investors, because they became habituated in the long past, to receive it free of cost. Simultaneously upfront commission has been reduced. To add fuel to the fire, the above development of appointing big distributors as SRO, I have already shifted my interest to LIC and General Insurance from mutual fund. I would advise other fellow distributors to consider the same.

These doubts are natural & logical. Please disqualify those who afe having their own vested interest. Request SEBI to show its credibility in the issue.

The process has just been initiated by this gentleman. Hope it snowballs so that the people at the helm can be awakened to the issue, which happens to be ''a burning issue''.

Trail only model is good for MF industry and IFA . AND most IFA having long term and sticky assets. but BANKS other hand churning heavily and escapped regulator thro their might. now bankers sell everything across table and most misselling happens from banking. for this reason RBI asked bankers should seperate entity for other sales in financial products ,since its conflict of interest to their customers.and unfortunatly sebi should have done this instead of RBI. Rameshkumar

Yes, completely agree with banning Upfront commission will greatly increase the sustainability of this business. Claw back, by the way, is a good thing to have happened. This would definitely hit the Churning regularly carried out by Banks.

I pray God that something good should happen to IFA community. Every now and then we are axed !! God only can save us.

Dear Sam Koshy, i totally agree with your views expressed on the above subject. I would request SEBI Committee to consider above views before taking any decision.

Let us hope that SEBI is definitely wise enough to understand the problem of the industry and will never appoint somebody as an SRO, who has their own vested interest.

Without a ban on Upfront commission and giving SRO status to FIAI is an injustice to small distributors/advisors. They may encourage upfront commissions after getting SRO status. Which is they are supporting now; It is not good for the industry in the medium to long term. Request the regulator to consider this issue before giving the SRO status . STOP SELLING NFO''''S AND POOR PERFORMING FUNDS. Let AMC sell/recommend the non performing funds to direct investors.

Yes , I agree with Mr. Sam Koshy , that the SRO status should not be given to any body or organization which has a substantial interest in the business that it has to regulate. I wish that SEBI will disqualify such applications , where ever there is possibility of conflict of interest. This SRO applicants must be industry neutral bodies. On the other hand , if upfront commissions are banned and uniform trail commissions are implemented, the unscrupulous churning will stop. This will also necessitate that only performing funds will survive. Which is good for the Investors in first place and the sincere distributors.

SWAYAM JAGO TABHI DESH JAGEGA. FUND HOUSES ARE NOT SINCERE. STOP SELLING NFO''S AND POOR PERFORMING FUNDS. REGULATORS ARE DEAF, DUMB AND THIEF. JAI HIND JAI BHARAT.

I support Mr. Sam Koshy''s view. It is unfair on part of IFAs. Now it is the need of the hour to ban the concept of paying higher commission in first year. Now it is necessary to publish Life of assets of all distributors. It should be printed on the website of all AMCs with average life of assets of Industry. Four categories can be made for it. 1. Equity 2. Hybrid & MIP 3. Debt & 4. Ultra Short Term & Liquid. So in each category Churning will become traceable. What is the use of giving any favor when / where churning is done? AMFI can give ranking or rating (based on their performance & life of assets) to distributors.

agreeing to ban upfront brokerage , it will simply destroy all the evils and devils in the MF industry and distributors will find more mobilizations from more retail customers, good for the nations future too.

Without a ban on Upfront commission and giving SRO status to FIAI is an injustice to small distributors/advisors. They may encourage upfront commissions after getting SRO status. Which is they are supporting now; It is not good for the industry in the medium to long term. Request the regulator to consider this issue before giving the SRO status