a hypothetical letter to my hypothetical client. Any similarity to something like this already written by somebody is a sheer accident.

Hello Mr. Client,

Sebi has vide its circular said I have to tell you all the earnings that I have from your account. I wish they had said that mutual fund houses should speak in a manner that the distributor can understand.

Yes, sure I know I do get paid for the investments that you make. However the statement that I get is a big consolidated statement that breaks my earnings period wise and not necessarily client wise. If it is client wise, then it is instalment wise. The cost of finding out how much I earn (possible to calculate) or will earn (impossible to calculate) is so high, that it is not worth having any client, let along you who is doing a Rs. 5000 SIP per month.

So what can I really tell you? In the SIP of Rs. 5000 that you are doing in xyzee fund, I earn about Rs. 20 a month – that is about Rs. 240 a year. Remember the meeting we had at Barista when you handed over the forms? Luckily we only had a coffee, and you paid the bill. That bill would be the amount that I earn in a year.

Sure I will earn a similar amount over the next 123 years also if you continue the SIP, but since I do not think I will live for more than 15 years, and my ARN may be active for only 5-6 more years, the trail commission of Rs. 1,23,45, 612 is pure theory. My trail commission would be more like Rs. 900, substantially lesser than what the Amc says i will earn if your SIP runs its full course of 123 years.

I also toyed with the idea of employing a boy/ girl to calculate all the trail commissions, I realised that this person will cost me about 70% of all the trail commission that I get. It is not that my trail commission is low, it is just that salaries have gone up far more than commissions. I am seriously considering joining a mutual fund as a ‘salaried’ agent.

Why ‘salaried’ agent? simply because my regulator gets a salary and he dare not comment about the rent, salaries, travel, printing (which you bear dear client), legal expenses, but he does not like the word ‘commission’.

So am looking for just a small job with a salary of Rs. 10 million. When the index goes to 24000, I am sure I will net a Million US $ bonus. Hey mippet just stay on in the fund, when the index goes up, my bonus goes up. One day the index will go up, right? Then I will tell you how brilliant is our fund management team. I am damn good at statistics, I hope you know that by reading my blogs.

No conflict of interest (if you think I will be interested in you, sympathies, you need more education), and I do not mind a million rupee trail. After all the US $ could be 90 by the time this happens, what say?


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