No Trail Fee forAdvisors?

开篇：润墨网以专业的文秘视角，为您筛选了一篇No Trail Fee forAdvisors?范文，如需获取更多写作素材，在线客服老师一对一协助。欢迎您的阅读与分享！

Will there be no ‘trail fee’ for mutual fund distributors who register themselves as investment advisors and not agents of mutual fund houses?

A concept paper issued by the Securities and Exchange Board of India (Sebi), the capital markets regulator, says that distributors of financial products who call themselves ‘investment advisors’ cannot accept any commission from financial companies and instead should charge a fee only from investors they are servicing.

Trail fee is the payment made to distributors by mutual funds for the investments they bring. The commission is paid on an annual basis as long as the investors remain invested in the fund.

Sebi has noted in the concept paper that since distributors receive commissions from both investors and manufacturers of financial products, this may lead to a situation where distributors are more concerned about the interest of the party(investor or manufacturer) that pays them better.

“The prevalence of divided loyalties may not be in the best interest of all the stakeholders concerned. It often results in a situation where the distributors are loyal to only themselves. They would happily churn investors’ portfolio and also squeeze more commission from the manufacturer,”Sebi says.

According to the concept paper, the person who interacts with the customer should declare upfront whether he is a financial advisor or an agent of a financial company.

While it is still not clear if Sebi wants to scrap trail fee on sales of mutual funds by investment advisors, a chief executive officer of a mutual fund house said on condition of anonymity that the observation made in the concept paper necessarily means no trail fee for investment advisors. Rajiv Bajaj, vicechairman and managing director, Bajaj Capital, a distributor of financial products, says,“Unless the regulator allows mutual funds to charge lower expense fees from investors who invest through advisors, this model would prove to be regressive. In India, investors are anyway not willing to pay advisors.”

Vivek Karwa, a certified financial planner, and chairman of Vridhi Investment Intermediaries, says, “Though the ideas floated through the concept paper are good, Sebi needs to co-ordinate with other regulators to implement the ideas across all kind of financial products. It also needs to address the issue of poor financial literacy among investors.”

–By Dipak Mondal