What an IFA body should do but AMFI will not

If in the course of your life you have been an investor, sub-broker, broker, teacher, auditor of mutual funds, trainer, content provider – you realize that you have certain advantages. In some of these positions you meet the MF industry as a boss and sometimes you meet them like a servant. Mostly it is the later, but that is a separate post.

So if you have audited the accounts of a mutual fund, you ask yourself:

– why is there an account which is credited for all the SHORT PAYMENTS to IFAs?
– when you pay MORE to an IFA by mistake, you claw back, what do you do when you pay short?
– when an IFA does not get his ARN renewed what happens to the trail commission?
– when a client dies what happens to the money lying in the client account?
– when an IFA dies why does the client not AUTOMATICALLY shift to ‘direct’ mode?
– when a cheque is sent to an IFA and comes back uncashed what happens to that amount?

the question is who will ask all these embarrassing questions?

IFA galaxy? No. I do not think so. It does not concern the big and active IFAs and many of these bodies are self funded, so they really do not have the bandwidth to do such work, nor do they have the necessary competencies.

the smaller IFA? hey he does not even know about such problems.

Amfi? You gotta be joking. Amfi is a manufacturer’s association. The direct beneficiary of NOT ASKING these questions is the promoters of amfi are the BENEFICIARIES….

SO, net net life goes on fine. Alls well with the world, and God is up there….

to quote a Hindi song ‘Aasman pe hai khuda aur zameen pe hum….aaj kal woh is tarah dekhta hai kum’…..

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4 Responses to “What an IFA body should do but AMFI will not”

  1. I really liked this post. You have raised very pertinent questions. And similar questions can be raised in various other situations in our country. In India, there’s no concern for right or wrong. If someone is in a position where he can misuse his power, it is very likely that he will.

    The default behaviour in India is – “keep the money if the rightful owner does not ask for it”. Whereas, the default behaviour should be “keep the money only if it is rightfully yours, otherwise you are doing the wrong thing”. I hope corporations understand this, and I hope the regulator, goverment, law, etc. start thinking about the weak, the common people.

  2. so lot of FD and other accounts money are lying in so uncalled with our banks!

  3. Subra sir,

    Just 2 days back NSE celebrated its 20th anniversary and Chindu was giving speech ,he said, “I recently attended two workshops, and I was told that mutual funds are not getting sold. Mutual fund is a sold product and not a bought product. Distributors need incentives to sell it.”
    So what does he mean by incentive to Distributor, bringing back entry load?
    whats your take?

  4. K S Viswanathan on January 8th, 2017 at 5:00 pm

    I am myself a senior citizen with an ARN. I find senior ARN holders though infirm and supported physically by their relatives attend refresher course to renew their ARN probably to continue to get their trail commission.I had written to AMFI to allow senior ARN holders say above 70 yrs to retire if they so desire and continue their trail commission till their demise, without any response from AMFI. Every profession has a retirement age, why not for ARN holders?

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