A brilliant move by Sebi to remove the upfront commission in the mutual fund industry. Awesome.
What is the implication of this?
1. Will the Investor get a better NAV? NO. he was anyway not paying any load.
2. Will the big distributor be hit? I mean somebody who has say Rs. 50 crores Aum and has been around for say 15 years? NO. Not at all.
3. Will it hurt the amc with say more than Rs. 50,000 crores aum? No. Not at all.
4. Specifically will it hurt Templeton? No, not at all, they have been paying trail for a very long time.
5. Who gains by doing this? Difficult to say.
6. Why has this been done? Difficult to say.
7. Will it benefit the Asset management Companies? Yes the big ones – because if the small ones are rendered ineffective, more money will flow to them.
8. Is it a deliberate ploy to get rid of the small mutual fund houses? Come on do not be so blunt. None of us are so brave to say that.
9. Will banks stop getting paid for doing business? Upfront commissions, yes, surely.
10. You mean banks will not be paid ANYTHING for bringing business? No, not exactly.
11. Are you not contradicting in points no. 9 and 10. Well no. Banks will be reimbursed for conducting training, travel, bank employees will be sent to Goa, Egypt, West Indies, US or Europe depending on how well they do. Of course the AMC what these guys do in these foreign locales. Y
12. Subra you mean the regulator does not know this?
I do not know. Will the regulator allow such things to happen? Of course not.
13. Unlucky number!!
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