PART 2… 5)Disclosure if required should be of full earnings on a website - what is the need to show it on each and every statement. 6) In no other industry earning from on customer to the distributor is displayed. I think ways suggested by Bagaria JI in above article should be looked and understood more deeply . Our industry has a long way to go and each and every IFA and his family has the right to grow , prosper and create wealth for themselves as well as their investors. With dialogues there will be a mid way which is good for the investors and respectable for the IFAs . All the MF association should come together and do the same in a positive way. Lets all do things for the good of our industry together. Let the United Forum in association with ASK Circle , FIFA, IFA Galaxy , KAMFA and all associations work on this and come out with a solution. We are with you all.

Nice Article Bagaria Ji, you always add value with your words of wisdom. Few points 1) MF is a push Product for now 2) Direct is there for the investors who dont need advice and for investors who can manage their wealth on their own or through RIA. Thats fine and investor friendly. 3) Disclosure of commission is not a solution when we have Direct plan in action. IF a client wants to opt for direct plan he can easily do so. But disclosing commission of an IFA on the account statement is really not a very nice thing. Better will be the way the salary or commission is disclosed on website of AMC or AMFI- same can be done ( this is only if it is so required) as mid way. 4) But if the Regulator has decided on this disclosure we should follow the rule. But to place our point and for the betterment of our investor we should do what ever is possible. PART 2 CONT...

I agree with views of Shri Pawan Agrawal. Its not question of distributors being appreciated but the whole MF industry per se has never received its share of appreciation from government notwithstanding the fact that it is bringing in about 3000 cr of long term retail money via SIP model. That insurance regulator has successfully convinced and attracted mind share of government for growth of its industry has unfortunately never perturbed our regulator!!

Thanks Bagaria ji, rebating shall not be good idea. My proposals are 1) Distribution license to the institutions like Banks and other financial institutions having dominance position should withdraw. 2) Distribution license to the individual/non individuals working for back office or having access to the data should also withdrawn as Registrars & Transfer agents etc.

Though youve made an attempt Sir, I dis-agree with what youve mentioned as - while others may choose to operate a discount model where they pass on some of their earnings to their clients. This is clearly not acceptable. We (IFAs) have demonstrated so far to all the investors how & why we are very different than LIC (life insurance) agents.

Nice article Bagariaji. I want to add one more point that Distributors should change their way of working and become a solution providers instead of product seller. By providing just financial planning and sugesting to make SIPs will not work you will have to work out different type of strategy where investor can not adopt the strategy in direct plan without your help. If Distributor can achieve this type of strategy then they can justify their remuneration.

1 .its clear , who is doing miss selling in market , IFAs or bank brokers with broker house , we all know what is qualification of bank employee for the selling of mutual fund and how they sell . and 2nd broker house , how they make sub broker and what he do . 2. if the SEBI discloser the commission of IFA , whos take the responsibility IFA security , SEBI AMFI and other then AMC .While all investor is not social some body is anti social . :D 3 And it is not the violation of privacy ? how you publicly open a IFA income . 4 if you want to transparency , you show all , like what is fund manager charges with value and percentage value , mkting expense and some more

Even though you seem to be asking for segregation, it seems you don’t want to give clarity on what an IFA gets i.e. whether upfront or Trail with your wording “The proposed system is also similar to trail “ . What do you mean by that Sir? Are you asking for a Trail or upfront after Segregation?

We all know SEBI doesn’t like pass backs and hence made it illegal. Pass back is detrimental to small IFAs who will be squeezed out by banks, NDs and online platforms if it is made Legal. But you are asking for legalising pass backs and still expect SEBI to trust us?

The regulator is not trusting us as we aren’t trustworthy Sir. You just presented another proof of why we are not trustworthy. It is years since the regulator has been insisting on doing away with upfront commissions even though he could as well have ordered a ban on them. But, have we listened? We ridiculed and tried to bulldoze our way and continued with upfront commissions. Upfront is the primary reason that the regulator is clamping down heavily and the recent disclosure circular is a part of it. You are still asking for upfront commissions and expect SEBI to trust us?

I fully agree with the comments of Mr.Pawan Agarwal.

I believe that there is no problem of direct plans if they are allowed to certain set of investors e.g. A basic certification test of financial market or capital market understandings to be made mandatory for the set of investors who do not wish to avail services of the distributors , similarily in any profession , like you are not allowed to self medication without prescription or you must have legal knowledge before the court of law and many more

Mein sayad wrong bhi ho satka hu ... Hum sab bimari ke lakshan batta rahe hai aur discuss kar rahe hai ... Par bimari kyu hai ye koie uspe nahi bol raha hai ... Mere hisab se Direct channel is root cause ... We should protest against Direct channel ... Na rahega Bas Na bajegi basuri ...

As MF is still a push product Regulator has to support the IFA community.Bagariaji has explained the situation in very simple words and hit the nail.He has put forward a practicle solution let all IFAs come together and go ahead with the proposal.Our motto should be to promote informed investors and protect their welalth and enhance their welfare.

I see it the other way round. It is the IFAs who have lost trust in the regulator and not vice versa. In my memory, I dont remember even one instance in last 8-10 years that the regulator has appreciated efforts of distribution to get investors interested in mutual funds. The number of people employed by distributors in a country with huge unemployment issues, the number of investors who have been introduced to mutual funds in a country where gold , ponzi schemes, real estate(with black money) rule, the number of years of their life that distributors have put to promote and serve the clients in a country where client services in every industry are worse; none of these have ever been recognised and appreciated. The only focus of regulator has been commission and income of distributors. Our FM lauded the industry for last year inflows in capital markets which countered the foreign outflows. Was the distributor mentioned anywhere by anybody?

Dear Mr. Bagaria, after reading your article, I must point out two things: A) Direct Plans was forced introduced to save a Investor (Buyer) who approaches the AMCs (Manufactures) to purchases fund schemes bypassing the Authorised Distributors (IFAs, NDs or Banks) as the investor is capable enough to take his own investment decision not needing any external help for the same, hence implying that Direct Plans were meant to be BOUGHT and NOT SOLD, and B) Where is the question of trust deficit when the Manufacturers and Distributors are allowed entry after a screening process accepted by the Regulator and hence if still there is an issue of mis-selling, then there have to be a rethink on the screening process as well as periodic auditing to catch the blacksheeps.

I think its very well defined, its still a push product. and people are not ready to pay fee even in a city like Gurgaon, so how can SEBI presume that. SEBI is not aware with the ground realities. and i dont understand one thing on one hand they say that financial products are related to market risk please consult your adviser before making an investment and on the other hand you they have opened DIRECT channel so that investors can come and burn their hands without understanding the complexity of the product, its ridiculous.

As always words of wisdom clearly explained in very simple language for everyone to understand. I fully agree with Bagaria jis views and second them. Lets all get together agree on one thing and engage all stakeholders and move ahead instead of having frequent regulations being forced upon us.

Govt. Want investment only his way like f.d ,NPS,ppf,nsc, like grunted instrument and charged service tax to IFA to stop his own