I was so amused at a suggestion that Rs. 100 will be paid as a one time transaction cost for some select mutual fund agents, that I have no clue how to react.
Yesterday 2 media companies wanted to know how it would work. I said I have no clue – will they pay Rs. 100 per transaction or will they pay Rs. 100 as a one time fee I did not know. Today I know it is Rs. 100 per transaction and a SIP will be treated as a single transaction.
Simple do a Rs. 1000 SIP for 6 months – or worse Rs. 500 for 6 months, then the Rs. 100 is not bad is it?
Rs. 500*6= Rs. 3000, Rs. 100 is 3% FULLY UP FRONT LOAD…i guess. So if a client wants to invest Rs. 5000 per month do 10 SIPs.
Well this is just one of the solutions i guess?
Will it make the business attractive to get the advisors to sell mutual funds? I doubt it.
Somebody (no not me) should do an exercise on theoretically how much should be:
– the load payable by a big fund house
– the load actually paid
– why is there such a HUGE difference
– what happens to the load that got saved by change of ARN
– that money is supposed to be used for ‘investor education’ – who is monitoring this amount? If it is SEBI can we get the data or is this data private?
– who is planning to create data about the mutual fund industry? For e.g. I wanted to know how many SIPs are current, what is the average, why do people stop their SIPs,…..no clue where to find the answers….
just like that…
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