Answer this question please!
1. Why do mutual fund distributors pay Rs.2500 to Amfi for a period of 3 years? What does Amfi do for them? Is it not a body representing the big mutual funds?
Assuming that there are 100,000 active distributors (conservative because this includes bank employees too) we are talking of an amount of
2500 * 100000 = 25 crores.
2. Why mutual funds are not asked to send a letter to all the clients about how much money was made by the amc, the trustees, the distributor, the auditor, the R & T agent on a per folio basis, so that the client knows how ‘big’ the distributor is compared to all the other players in the system?
just asking people like Muthu, IFA’ Bhat, FundsIndia….and the other caretakers of the distributors 🙂 (p.s. I know many others in Mumbai also, but not naming them!!)
Muthu
I’m no care taker of distributors:-) Mr.Bhat is definitely wearing that hat as the head of IFA Galaxy. Is Mr.Srikanth the care taker of distributors? I don’t know. May be he can answer the same.
I’m not an activist and it is not in my DNA to actively participate in any association for any cause. But I do as a passive member of such professional community; try to see if I can add some value; provided the people who head them are interested in listening to my point of view.
I do think there was a sub-limit on fund’s expense ratio on various categories of payments- management fees, trail commission, RTA payments, marketing expenses etc. Whether the sub-limit exists now or not, still the expenses are classified under this category. May be fund houses can give in their fact sheet a break up of the expense ration in terms of percentage. Even I’m curious to know the same.
There are two aspects of payment one needs to make to take AMFI certification. Suppose if I my ARN is expiring now, I’ve two options. Either to take an exam in advisory module through NISM by paying Rs.1000/- or attend a 2 day program of NISM by paying Rs.3400/-
This is only for getting the certification and not for ARN card. People who need to distribute funds under their code only get ARN. The current fee for renewal of an ARN is Rs.2500/- for individuals. The amount gets higher and higher depending upon the nature of organization- partnership, companies etc.
The extrapolation of fee to 100,000 people is a flawed assumption. As I said not all people who clear AMFI module gets ARN by paying Rs.2500/- In fact, AMCs, National distributors, banks etc. strictly prohibit their staff from holding an ARN card. So a RM would have cleared the advisory module but the ARN code he would be using would that of be of banks. Irrespective of say thousands of AMFI certificate holders with SBI, there would be only ARN, that of SBI, under which all transactions for PAN-India would happen.
As I mentioned above, the fee is paid to AMFI only for those wanting to get the ARN cards not by all who clear the NISM certification on advisory module.
Coming home, my staff has cleared the NISM advisory module but do not possess an ARN card. Conflict of interest:-)
Muthu
Just saw this in Moneylife:
Revised mutual funds requirements will hurt independent distributors, enrich NISM
http://www.moneylife.in/article/revised-mutual-funds-requirements-will-hurt-independent-distributors-enrich-nism/25183.html
Srikanth
For the record, I can barely take care of FundsIndia as it is 🙂
Srikanth
param
very good point, AMFI is a club of AMCs, so they should pay. unless AMFI chooses to represent Distributors, they should not be entitled to any money from them. what is next, investors to pay 50 rs per folio to AMFI for providing a dumb website???
anon
perhaps this is not the correct post, but permit me, subrabhai:
Who on earth is Manipal Technologies? And WHO gave them permission to look at my MF transactions? yes, I’m fuming.
And all those lovely details put in a Rs.3 stamp envelope sent by ordinary post?
What a gigantic security breach.
Have politely written to SEBI. In due course will politely push this to Sucheta-ben and Monika-ben.
This is asinine.
Arun
@anon
Are you referring to those monthly / quarterly mails sent by AMFI?
Yeah, they don’t even mask any details.
And any idea if there’s an option to receive those mails in electronic form or opt out of it altogether?
subramian
Muthu
Bank employees also have to pass the exam and HAVE AN ARN number. However this number is tagged to the bank or the ND. So the numbers are not very wrong. Assuming Icici bank has 2000 branches * 5 people = 10,000 amfi certifications. Just extrapolate please
dp gandhi
Just set the record right I am promotor director of a co who’s only income is from MF’S commsion and it has very good income before entry load ban.My three year period expires 15 months ago and last month I again cleared it. Now AMFI is cheating, and asking me to pay 27500/- fees, 25000/- from my co,and 2500 from me as I passed the exam as director of co,Just for record my total commsion for last 15 months is 20450/- from all mf’s.
WHO WILL SAVE DISTRIBUTORS FROM THESE MODERN THUGS
Muthu
In response to Mr.Subramanian : I spoke to people in banking and ND channels to see if there is any mistake in what I mentioned above. In fact holding an individual ARN card is prohibited in these institutions; they have to clear only the NISM advisory module and SHOULD NOT apply for ARN. The only ARN used would be that of of a bank and ND.