Shaky financial advisors look for stronger ground
Source: http://www.hindustantimes.com/Shaky-financial-advisors-look-for-stronger-ground/Article1-643146.aspx
Independent financial advisors have gained ground in the investment business after a year of tumult that saw a regulator-enforced shift from commission-based earnings to fee-based earnings but the industry is still shaky. Advisors have courageously bid good-bye to the old regime, but are grumbling about the poor earnings potential in the new world after the Securities and Exchange Board of India (SEBI) backed measures that barred entry loads in mutual funds.
A survey of 373 independent advisors across the country conducted by Cafemutual reveals that as many as 95% want regulation that would help raise the standard of financial advisory firms.
The survey revealed that in a clear shift of focus, as many as 42% of independent financial advisors have started charging fees from their clients.
However, commissions have always been influencing the funds sold and the survey results confirm this. Almost 57% of the independent financial advisors in the survey said that commission structure was influential in pushing investment products.
Almost 70% of those surveyed said the stance of the mutual fund industry on entry load ban has not been supportive of independent financial advisors.
Most of the independent financial advisors (74%) feel that the decision on no entry loads would not be reversed even with a new SEBI chief coming on board in February after the end of incumbent chairman CB Bhave’s term.
"I think we will come out with a progressive solution rather than going back on entry load as it is a good decision in the long run," said the head of private banking at a leading private sector bank in India.
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