Dear All,
In case of sad demise of an ARN holder what will happen with his/her trail commission
i) if the nominee is also an ARN holder
ii) if the nominee is not an ARN holder
I will be highly obliged if any one can clarify.
No local AMC has a clear view in this regard.
Regards
Saikat Sen (MFRT)
ARN 0402
16 comments:
Message Received from Mr. Sunil Bagat from Pondicherry.
dear Sir,
Generally in the case of all MFs, as long as the investment stays intact the trail commission would go to the nominee , even if he is not an ARN holder. By staying intact we mean , the investor does not go 'direct' or does not change his advisor. I think only TAta Mf insists that for the trail to continue acruing to the nominee , the nominee must have the ARN certification.
If the nominee is an ARN holder then also the trail will accrue to him. Besides after empanelling with the MF , he/she will be able to earn an upfront commission from the mutual fund house on the new busines done as well be entitled to the trail on the same.
Sunil Bhagat
ARN-9646
Reply received from George Samuel
I have asked this question to managers of several AMCs. No one has ever given a satisfactory answer. AMCs do not know. They have no definite plan. While empanelling they simply as the name of the nominee, but it has no meaning.
Perhaps, we may ask SEBI (!!!!!!)
Perhaps, we may ask AMFI (!!!!!!!!!!!!!!)
Any way, it is worth finding out.
George Samuel
ARN-1870
Cochin
Reply received from prafull doshi
Dear All
My knowledge says that if a ARN holder dies than the trail commission or any more benifit upto expiry of his ARN license, the nominee should get or can claim the traill commission.But regarding this how the AMC and registrars look at it is important.And AMFI should provide some clarifications.
Regards,
PRAFULL DOSHI.
ARN-5432.Hyderabad.
Received from Venkatasubramanian Pasupathi
Dear All,
Whether the nominee is an ARN holder or not the general principle of passing on the benefit is only to the nominee. If a pensioner dies his/her spouse termed to be nominee is eligible to draw the family pension of the deceased. On this analogy the nominee of a ARN holder is entitled to all benefits irrespective of the fact whether the nominee is an ARN holder or not. My knowledge speaks like this. On a step forward even though the nomination is not filed due to the fact that the spouse is not alive at the time of filing the nomination and the nomination is not filed on this score, the legal heirs - especially unmarried children and handicapped children who were dependent on his income shall prefer a claim by production of Legal Heir Certificate and Death Certificate etc., wherever required. These are general principles of justice and denial of this benefit would amount to great loss and sufferings to the entitled persons. You may also refer the Agreement made between the ARN and AMC in this
regard.
Ys P. Venkatasubramanian
Received from sanjiv pai
Not about only trail commition, what about SIP up front.
Like in LIC if sad demise of advisor ,complition of 5 years of his service
(12 polices every year minimum),His next of kin got right on up front
of all policies,if he or she dont have IRDA still it is same.
Why not in MF?
Pai Sanjiv Vaidyaraj
ARN33159(kochi)
Received from mari muthu
Dear all,
I am in madurai, some amc"s give the trial to nominee but as a arn holder they give the correct nominee but i am not clear.
Received from
Ravi Shankar Malharirao
we have to findout what the governing act on ARN says. AMFI should clarify on this subject if the nominee is an ARN holder then i dont think that the trial commission will pass on to him/her but nominee at least should get some kind of compenstion in case any eventuality.
The AMC/distributor can issue a group insurance policy and the respective premium can be deducted from the commission. our commission attracts service tax and the govt is also liable to make some kind of social security to the ARN holders.
M. Ravi Shankar
good and informative thread.
-Constitution of the deceased ARN holder is a key factor. If it is a business entity, it continues. So, makes sense for serious IFA's to make their business succession plans asap.
-For individual cases
-upfront on live SIP/STP only if nominee is a ARN holder and empanels
- trail , different practices are there as pointed out earlier in this thread. It is better for serious IFA's to ensure that the nominee is also a ARN holder, not only for this trail but also to service the clients.
Babu
IFA Galaxy thanks Mr. Srinivasan of Tata Mutual Fund for sending us the detailed reply
Dear Sir,
The nominee may or may not be ARN holder.
The following documents are required;
1) Request letter from Nominee
2) Death Certificate of deceased ARN hoder with notary attestation
3) Bank details duly attested by the banker
4) Legar heir certificate
5) No-objection letter from other legal heirs
The nominee can enjoy only the existing trail fee, if he is not an ARN holder. Also, he cannot able to do any further business until he becomes an ARN holder.
For any further clarifications, please feel free to contact me.
Regards,
Srinivasan
Tata Asset Management Limited.,
Chennai
Srinivasan@tataamc.com
Received from
Sudhakaran vavullipathi
If demise happened to an ARN holder and if the nominee is having ARN all the brokerage will be passed to the nominee and if Not an ARN for the first 6 months nominee will get commission and if he/she takes ARN will continue to get the commission
Received from
EASWARAN JAYAPRAKASH
Since you have nominated one person to receive the trial fees after the demise, there need not be any doubt whether she is an ARN HOLDER OR NOT.
Irrespective of that she is the nominee and so she is eligible to get the trial fees.This is my opinion.
thanking you,
yours truly
e.jayaprakash. ARN 9117
Received from
venkatadurgaprasad popuri
Nominee will get the commission irrespctive of holding ARN.
This info is to the best of my knowledge.
Thanks,
P.V.D.Prasad.
IFA Galaxy thanks
Samantha Ferris
Client Services
HDFC Asset Management Co. Ltd.
Bangalore
Dear Sir,
The replies are given below:
1. If the ARN is non-individual, say partnership, pvt. Ltd, LLC, etc… what is the situation.
In this case the authorised signatories would change and a letter intimating the death of the concerned signatory along with the change in the signatories with the specimen signatures would need to be submitted. Payout would continue to be done to the registered bank account in the name of the entity.
2. If the ARN is individual, what happens in the foll. Cases.
a. Trail on the AUM as on date of death. Is it paid to the nominee until the assets are held. Is the nominee required to be a ARN holder. Are there any other requirements.
Trail is paid for the existing business which has been procured before the expiry of the distributor. Nominee need not be a ARN holder. There are no other requirements other than the intimation by nominee of death of distributor vide written letter duly signed with banker's attestation of his / her signature, bank details and proof of the same. Notarized copy of death certificate would also be required.
b. Are fresh purchases , further SIP/STP’s on already started ones allowed in deceased ARN holder Code after death intimation and if yes, what is the position of upfront/trail on these assets.
Fresh purchases, further SIP/STPs on already started ones may be processed under the deceased ARN holder's code however the code will be inactive and the new business procured under the the code will not be considered for brokerage payment. Upfront as well as trail brokerage is not payable for SIP/STP transactions executed after the expiry of the distributor, although these may have been registered before the expiry of the distributor.
Warm Regards,
Samantha Ferris
Client Services
HDFC Asset Management Co. Ltd.
Bangalore
Ph: 080 - 66205305 / (0) 9886719218
Fax: 080 - 41125255
Email: samanthaf@hdfcfund.com
Thanx Mr Srinivasan of Tata Asset Management Limited.Chennai, for giving clear picture on the subject.
Saikat Sen
ARN 0402
Ranci
IFA Galaxy Thanks
Smitha S AVP & Zonal Head South
- Client Response Bangalore
DSP BlackRock Mutual Fund
Dear Sir,
To clarify the points;
1) If the ARN is non-individual, say partnership, pvt. Ltd, LLC, etc… what is the situation. - There will be no nominee registration made as it will be partnership/Pvt Ltd/LLC. and the clause mentioned in the partnership deed/MOA will be applicable in case of death of a partner/director.
2) If the ARN is individual/sole proprietorship what happens in the foll. Cases.
a. Trail on the AUM as on date of death. Is it paid to the nominee until the assets are held. Is the nominee required to be a ARN holder. Are there any other requirements. - The nominee is not required to be an ARN holder. If the nominee is registered with us, then only the trail will be paid to the nominee, not the upfront. If the nominee is not registered then the claimant should submit documents like NOC, legal hiership document etc. If any purchases are made between the death of the distributor till the asset transfer to the nominee takes place, neither upfront nor trail will be paid to those cases.
b. Are fresh purchases , further SIP/STP’s on already started ones allowed in deceased ARN holder Code after death intimation and if yes, what is the position of upfront/trail on these assets. - For fresh purchases and SIPs/STPs already registered cases no upfront will be paid, only the trail will be passed on to the nominee.
We thank you for choosing to invest with DSP BlackRock Mutual Fund. Please write to us at service@dspblackrock.com for any assistance.
Best Regards,
Smitha S AVP & Zonal Head South
- Client Response Bangalore
DSP BlackRock Mutual Fund:
www.dspblackrock.com, service@dspblackrock.com
Contact Centre: 1800 200 4499
(Monday through Saturday, 8am to 9pm)
I see that some of the mutual funds have mentioned that the nominee will have to give NOC from legal heirs.What is the need for that when his name is already mentioned as the nominee.
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