In order to encourage 7% direct class, can industry discourage distributors who have collected 93% amount? Diy will remove many distributors from industry. It can also finish the trail income from existing aum.
At present amcs are not making profit, new flow of money has slowed down. & Industry aum is reducing. In this critical scenario if diy is started with less TER how will it give profits to amcs? If direct class is profitable for amcs, why have they not prepared infrastructure for it in last 56 months? Distributors may not find equal level, so that number of active distributors will further reduce. Any industry can not increase penetration, where 93% business stake holder class can not sustain. How it will increase Total aum of the industry? It will definitely encourage switches from regular plan to diy. In present scenario many small distributors, find it difficult to meet their monthly expenses. How will they sustain in presence of diy?
If diy is started with less TER, retail clients will come to invest without any proper consultation with ARN holder. What will be the future of such investment? I can take medicine from medical store directly without consulting any doctor. But is it good for my health? I don’t think these all things are done to remove distributors. In small saving schemes also commissions are reduced. Negative impact of these things, discourage habit of savings. If agents will leave this business nobody will follow to get amount invested in this scenario of heavy inflation. More than 90% of our population consists of middle class & lower class. It is the investment agent who follows the client for the business & in this process habit of savings is automatically encouraged.
If all participants are united nobody can dominate anything on us. If all of us forget entry load & hike in TER, then there is no other reason left for introduction of direct class In trying to gain more, we are giving opportunity & reason for introduction of diy.