Dear Mr.Ramesh Bhat :
At the outset, I congratulate you for the wonder session conducted at Trichy on 5th March 2011. During that session, we discussed abouthow to charge a customer and we tried our level best to get suggestions from the participants.
I furnish below my suggestions :
In India, if option is given to someone, they will try to take the easy and the one which is favourable to them. ( Ex : If wearing helmelt is optional, no one would wear and if the same is made compulsory everyone would wear )
In our business, paying fees to the AMFI Registered distributor is optional. Each and every AMC has printed in their KIM ( Common application form ) like this " Upfront commission shall be paid directly by the investor to the AMFI Registered Distributors based on the Investors' assessment of various factors including the service rendered by the distributor. "
The AMCs have printed the above just to satisfy the distributor. Nothing else !!
My suggestion is : Instead of printing the above, they have to print a separate declaration on the bottom of the second page of the common application form. I suggest a format also.
Declaration by the Investor/s :
I understand that as per SEBI Circular no : SEBI / IMD / CIR No.4 / 168230 / 09 dated June 30, 2009, no entry load will be charged by the scheme to the investor effective August 1, 2009. Upfront commission shall be paid directly by the investor to the AMFI Registered Distributors based on the Investors' assessment of various factors including the service rendered by the ARN Holder.
I have given a cheque for Rs. xxxxxxx / - in favour of " Scheme Name " through Mr. XXXXX having ARN XXXXX. I am satisfied with his advice and service rendered to me and I am paying a fee of Rs.XXX to Mr. XXXXX having ARN XXXXX.
Signature of the 1st applicant Signature of the 2nd applicant Signature of the 3rd applicant
If the above is made compulsory, i.e., without the declaration by the investors the transaction should not be processed, then the ARN holders would collect fees based on their advice and service. To my understanding, SEBI has not fixed any ceiling w.r.t. fees payable by the investor to the distributor. Hence, based on the distributors quality the fees would vary. The investors has got the freedom to pay any amount.
I look forward to your comments.
Thanks and Best Regards,
Balaji.K
Mobile : 97900 1112
18 comments:
Dear Mr.Balaji,
You have given an excellent suggestion. I hope this goes to the notice
of the concerned.
regards
Satish Vagale
licvagale@gmail.com
Mr.Ramesh Bhat,
i think MR.balaji has valid suggestion.we should make all AMC to make it complusary to print such declaration.to add to fees or consultancy charges should be paid in cheque only,minium 2% to 3% depending upon location ,petrol expenses etc.Now a days cost of living is increasin our income is decreasing day by day.There is no point to talk to AMC. we all together approach to SEBI chairman Mr. Sinha.united we stand.
lets fight together.put forth valid suggestion to SEBI by submitting memorandum.
chandrashekhar kulkarni
ARN=15259
Nashik M.S.
chandra.kulkarni@yahoo.com
I.MOHANKUMAR PILLAI HERE BY THANKS FOR THE SUGESSTIONS FORWARDED,IS IT POSIBLE MAKES CLIENT PAY FOR THE SERVICES RENTERED BY FINANCIAL ADVISORS.
MOHANKUMAR PILLAI
mohan_p38@rediffmail.com
CHANGE IS NOT ONLY FOR THE MARKETING FORCE, BUT IT IS NEEDED FOR THE ADMIN ALSO. SO AMCS CAN THINK OF THIS STRATEGY TO SUPPORT THE IFAS...THANKS MR.BALAJI FOR THIS EXCELLENT IDEA..
Mrs. Padma Devan
mahas_devan@yahoo.com
Really superb and our association will take up this matter to all amcs to implement it as compulsory.
with warm regards
M.SURESH
IFA TRICHY
suresh.441968@gmail.com
Great idea .hopefully sinha implements it
Manoj Sinha
manoj_sinha1969@yahoo.co.in
Thats a brilliant suggestion.
Thiagarajan
Sevy
sevyindia@yahoo.com
Dear Sirs
It is a Very good suggestions given by Mr. Balaji,
But, unless some specific instructions are not mentioned, the Investors will be reluctant to pay the fees.
My another suggestion is that a minimum amount to be fixed like Rs.250/- or 2% which ever is higher should be paid by the investors to the AMFI registered Distributors, which will be more helpful and made investors to aware and howmuch they can pay exactly.
Thanks & regards
N MOHAN
ARN 68430
mecmohan2002@yahoo.co.in
Good suggestion i donot know how many IFAs really get paid any reasonable service charges on my part i have stopped my activities as MF agent
seetharaman.k arn49538
seetharaman1947@yahoo.com
Mr. Balaji,
Yes, it is a good idea to get the fees to be paid by the investor in the appln form. By this, investor is formalising the agreement and establishes a proffessional relationship. The question is whether the investor will do it every time he invests? In a no load entry scenario, important thing is to do regular transactions. Good idea and a practical suggestion, depends on AMCs to implement it and print in the form.
warm regards,
K. Anand
Chennai
kishmu64@yahoo.com
ARN 5322
KUDOS...... EXCELLENT SUGGESTION.... HOPE TO GET ATLEAST THIS SUPPORT FROM AMCS,TO EARN OUR BREAD...
Really good thought, AMFI have to try to implement this
Do not you think that this should be directly sent to AMFI and SEBI.
Nayan
Dear friends,
I read the comments on how to charge?
My view is why to charge?
Noload was started aug 09, we waited by april 10, 1st amc came out saying per app for 5 year term for sip then now almost all amc r paying the same. The amc req retail distributors like us. They will find new ways to pay us.
Previously they used to charge load and pay us 4 percent now without load they r paying us same.
Let us give them time they will def find new ways to pay us, till that we will do other sales like debt fund, they need to pay us in 1 time equity sales.
Regards,
Alagappan
9841055577
Sent from my BlackBerry® smartphone
Yes. This is an excellent suggestion. But this is not solving all problems..
For instance, few clients came for our advisory services and we have explained the costs. We spent lot time and efforts to design their portfolio. Then they said they will check and decide later and in many cases they went to AMC and submitted their applications directly to cut us out !
In an another instance, some one accepted to submit the application through us and they they did so for a merger amount through our ARN code and then made direct purchase later with AMC and cut us out of fee!
It’s general character of Indians to expect a free advise! Many people even wonder why do they have to pay money for an advise !? They find it really strange we ask them to pay for advise!!
It’s very Important to note that “this is India” and not US and Europe”” !.. We have plenty of rules and laws.. but no infrastructure for implementation. Is just impossible to get justice quickly and in time.. Compensations for such cases is literally impossible and it’s tedious and a long process to file case in consumer court etc., and who has time to do all this?
When we can’t provide legal frame work for such cheating cases by clients similar to those available in the western markets, How can our regulators think of imposing rules similar to that of western countries??
When ULIPS are charging minimum of 5-10% load for selling product absolutely similar to that of MFs, and regulators have allowed it royally, then why discriminate MF distributors ? Moreover, which business in India is working on 1% or 2% commission? Even an illiterate real estate broker charges 2% commission from both Buyer n seller (total 4%) !! So why so many restrictions ONLLY for MF distributors?
Can any body enlighten us if this whole thing of removal of Entry load has any way helped the MF industry or getting more retail participation into Capital markets? Who is really keen to spend time and energy with small retail investor willing to put in 1000/- 5000/- 10000/- etc., to get 50-100/- with which you can’t even buy a KG of onions today?!! what can u earn with this? And if we can’t get retail investors to come into markets, how can we make our economy/capital market strong and resilient from the muscle power of FIIs ?
Also the whole Idea of the regulators to remove entry load seems to be totally un thought off and did not taken into account Indian mentality and Indian context.. We are Indians and we have to do business like Indians do.. Not how westerners do!!
Today We are so dependent on FIIs who is able to move markets by 500 points just be buying/selling a thousand Crores out of >2 lakhs Crores market dept!?? How long we can depend on FIIS to control movements of our markets? I wonder sometimes if there is some kind of scam in getting these rules implemented in India so that retailers are not allowed to get into Capital market so that FII’s can keep their power to move our markets and dominate Indians with their Economic Imperialism!?
All this seems to be a typical Bureaucratic way of functioning by our so called regulators without considering Entrepreneurial spirit of Indians and their way of doing the business.
Considering all such issues, To the best of our knowledge lot of IFAs have opted out of this business and doing more remunerative ventures and I really do not u/stand what has ultimately been achieved by implementing these kind of rules by SEBI..
Dear All,
It is agreed by all that no INDIAN is willing to pay DIRECTLY for the advice given for investments in MFs.There are two ways one can TRY to overcome this problem.
1. A small correction can be made to the suggestion made by Mr.Balaji.That is, instead of asking for a separate cheque, the client can be asked to request the concerned AMCs to give 2% / 3% of his / her investment to the advisor as a fee for his advise.
2.It should be made mandatory that an ARN holder should attest for any transaction made after investment ( be it change of address, change of bank details,redemption etc ) and it should have a compulsory payment of 2% to ARN signatory or AMC in case of direct transaction.
Anand.
Salem.
hI bALAJI
VERY GOOD SUGGESTION.WORTH FOR THE FORUM TO TAKE UP AT NATIONAL LEVEL
RGDS
BALAKRISHNAN.M.G
ARN HOLDER
balakrishna panicker
panickerb@rediffmail.com
DIRECT Applications were initiated in a Entry Load Era.
Now that there is hardly any pricing difference due to Zero Entry Load Structure ,whether there is at all a need for a DIRECT Channel.
Also whether the Investments advised through DIRECT channel are after providing competing products performance comparison ,Expenses Ratios comparison as DIRECT channel advise only products available under OWN umbrella.
Post a Comment