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'SEBI Wants to Remove Retail Investors'

The SEBI decision to abolish entry load has been slammed by fund advisors

After the Securities and Exchange Board of India (SEBI) said that entry loads will be discontinued Value Research asked the very people who will be most affected by the move to give their reactions – the fund advisors.

Here are some samples:

Jayesh Ashplya: “One senseless decision has crushed the efforts and hard work of thousands of financial advisors like me”

We indeed are in big trouble now. I do not understand what made Mr Bhave take such a drastic decision.
He has ruined the lives of thousands of distributors whose main source of livelihood was MF distribution.

Initially I was told by some AMC people that this move has been taken to improve the standard of Indian mutual fund market and take them to the quality standards applicable in America. It makes no sense comparing America with India. In America they put you behind the bars if they catch you with pirated software whereas in India about 90 percent of the literate population who own a computer have pirated software. It is senseless comparing India with America.

It looks like people sitting at the top level in the regulatory body do not have any idea about the ground level reality. If Mr Bhave is so much bothered about the transparency then what did he do to those 3 AMCs who had done shabby deals with the promoters of some mid-sized companies somewhere in the month of Jan-Feb 2009?

Why didn’t the SEBI inform the investors about such deals and publicly announced the names of the AMCs -- the Economic Times mentioning the shabby deal without mentioning the AMCs name.

In India we have to go to the investors and  convince them to investing in mutual fund.
No investor would be ready to give a separate cheque as fees for our advice and services. In India we are living in a society where advice is considered free.

Ever since I started mutual fund consultancy I have been slogging day and night to build strong relations with my clients. Never cared for the scorching heat of the summers or the heavy rains. I just kept working because I thought I can make a wonderful career in this business. I started dreaming again. My sincerity and hard work had started paying off when one announcement of Mr. Bhave ruined everything. I have no words to express how helpless I am feeling now. One senseless decision has crushed the efforts and hard work of thousands of financial advisors like me.

I do not see any career in this business now.
I pray to god now to give us courage, enthusiasm and will-power to start some new business which can give us the financial freedom which mutual fund industry gave. I also pray to god to give Mr Bhave some wisdom so that next time he doesn’t take any such senseless decision who spoils the lives of thousands of people.

May god bless Mr Bhave and the mutual fund industry.

Mitesh Chafadkar: “SEBI should look into this matter and force AMCs to pay upfront commission to all IFA distributors and save their future”

As per your latest issue some AMCs are pushing their funds with out entry load even before the circular i.e. they can afford to pay the distributor easily without charging the investor.
SEBI should look into this matter and force AMCs to pay upfront commission to all IFA distributors and save their future.

Pradip Kumar Agarwal: “With one stroke SEBI wants to remove retail investors. MF's will only be too happy to deal with HNI's and corporates”

One point which many retail investors have overlooked is the fact that at one place you can collect forms of all MF's. I stay at Noida, and several MFs do not have any branches there. When at this location they do not exist, then the fate of investors in smaller towns can be well understood. This is the worst decision SEBI has taken.
Probably, with one stroke SEBI wants to remove retail investors. MF's will only be too happy to deal with HNI's and corporates.

Vikas Gupta: “If investors approach AMCs directly they will receive biased advice”

It will be suicidal for the mutual funds in India as the industry is at a nascent stage at the moment. If IFAs/ Distributors would not get upfront brokerage, most of them have to change their preferences and there would be hardly anybody to advise retail investors. If investors approach AMCs directly they will receive biased advice and in this way, MF share out of total savings would be decreasing instead of increasing, which is just opposite of what our government wants.

Also read :
‘Don’t Kill the MF Industry’
'It is Like Being Laid Off'
'SEBI Has Grudge Against Distributors'
'Investors Are Not Self-Motivated'