There should be no doubt whatsoever that Upfront commission induced churning attracted the gaze of regulators and the government in the first place. Upfront should go to win back the trust of authorities as well as investors. Segregating a transact only distributor & advisor at remuneration, giving only and equal trail to all, not only would have reduced the burden of Service Tax on more than 90% of IFAs (as service tax can then be charged to scheme) but also increases confidence of investors in the industry too.

Obviously this (Concentration of a major part of commissions in a few hands) hasnt happened overnight and is a result of the incentive structure (Predominantly upfront) since the inception of the industry. Doesnt it indicate a systemic tilt towards bigger distributors ? Is concentrating the entire industry in the hands of a few hundred big distributors good for it and the country? Arent the invisible conflict of interests responsible for this? Does a few distributors controlling the entire industry increase brand visibility? Isnt it natural that the entire industry is concentrated where these big distributors feel it to be profitable, impeding the reach of the industry & harming the interest of a majority of the Independent advisors and the small investors that they serve ? Can the industry attain sustainable growth with such skewed incentive system?

The argument that removal of upfront commissions doesnt allow new intermediaries to come in is a fallacious one. After all upfront is the predominant mode of remuneration since the inception of Mutual Funds & even today. Then why is the number of distributors reduced? One interesting thing to observe from the presentations at the recent IFA Galaxy Summit is, out of the Total Rs.5,500 Crore Commissions paid in FY 2014-15, approximately Rs.5000 Crore went to just 500 distributors. Only approximately Rs.500 Crore was paid to all the remaining independent advisors (who form more than 90% of the intermediaries).

Dear Mam, I agree with your views and suggestions given. Many IFAs even not in position to maintain there cost of leaving at early stage. No investors feels need of mutual fund products and hence they are not paying fees. How can IFA wil be survive with so much less pay. You are humbly request to fight for our very badic rights. We all together are with you and our Association. Thanking you.

Excellent work , very impressive arguments To protect all stakeholders of mutual fund industry.

Extremely important for IFAs. I request & suggest to send out few imp. Questionnaire from all IFAs (only) through some social media or some other IT platform, compile it and lets us meet Finance Minister first & then PM, if required. They need to understand the role we IFAs play in helping investors meeting their goals/needs, and request them to consider our views each time, all time especially when matter/things that impact us & our clients.

As a matter of fact, all sales contests need to be done away with, because if there will be no contest - no buying behaviour distortion- portfolios will run as close as is humanly possible in equilibrium. Let distributors pay for their own trips instead.

Ifas cannot be transferred out to a branch or a city, we cannot merge schemes like amcs do- essentially its IPOs gone awry! Like our commissions/ bonuses , longevity of assets are disclosed, its only fair that amcs CEOs fixed income and bonuses be transparent, as also the fund managers- sales staff, bonus and salary basis performance of scheme and mobilisation of assets. After all they are the mother source- we sell what they create, National distributors and banks too must give details of bonuses being paid to their sales team - break up. It is very convenient to flog IFAs as the malaise. THere are three distinct broker groups- and you have to recognise the centrality, treat each to a common principal and separate tweaking of each category as per their uniqueness.We IFAs are a dying breed- the MBS crisis, money laws in offshore and mainland Europe, the investment blow outs of the whale, the derivative team in Europe are tales that make books and there were no IFAS involved here.

Thanks for covering all points

Thanks to FIFA and other stake holders to come out with such a beautiful report that well addressed all distributor fraternity.

I appreciate the pain taken to present a detailed representation to the recommendations of Sumit Bose Committee and hope the Government will go through and abandon the whole report in the interest of both Mutual Fund and Insurance industry.

Well articulated response with more depth to each aspect of distribution!! Good to see various IFA associations (across India) coming together as United Front and made it possible.. Kudos to all the IFAs association!!! We came together, now lets stay together

Thanks a lot FIFA.

Excellent work by FIFA, it’s very important to connect with each and show the unity to our industry.

Good work by FIFA

Friends, this is for our benefit, just read the response given by FIFA, it is so amazingly written and presented. As IFAs, as individuals, we could never have been able to do it. Thanks to the entire team of FIFA who has put in the hard hours in compiling it up.

Brilliant response. Thats what we need. Great work FIFA.