Now MFs cannot charge entry load even if you make investment through a distributor.( Directive of SEBI -- news ). This is definitely a good news for investor. But there would be lesser motivation for the distributors to promote mutual fund investments.
If the investments are made through distributors or through online trading sites ( that have this facility), no entry load would be payable. But the continuation of such services by distributors or service portals without any commission needs to be seen.
This is definitely a good news for the retail investors.
8 comments:
Its pure double standards adopted by SEBI against mutual fund distributor community. It all started when Damodaran took over the reins of SEBI, If you recall he was heading UTI mutual funds prior before taking over the SEBI assignment. As an AMC he was not succesful since not many distributor/bank entertained him ( sell his funds) those who did demanded premium commision over and above the load. Probably he had the grudge against the distribution community and he got the teeth to teach them a lesson. Now Bhave is only continuing his predecessor like a loyal pupil. SEBI is turning blind eye to ULIPs which is charging as high as 50-60% management fee, they are too bothered to safeguard the investors interest in mutual fund which works on a thin margin of 2.25%. If this is not double standard what else is??
Thank you for the post ,but It's not clear enough I hope if you are going to clear things more...
Certainly it is good news for retail investors, but this may not provide any significant cost advantage to them as they will now have to negotiate a brokerage / service fee with the MF agents and distributors.
Also see our perspective on this development Mutual Funds – Impact of abolished entry load
ULIPs are not regulated by SEBI. I think it comes under IRDA...
But from which date it will be effective ? I can see still my MF fund are charging the entry load
IF IT GOOD FOR INVESTOR/CUSTOMER WHY SAME RULE NOT APPLICABLE FOR ALL TYPE OF FINANCIAL AND CONSUMER PRODUCT SALES.IF 2% COMMISSION IS BIG WHO CAN PROMOTE THE PRODUCT THIS IS SUCIDEL STEP FOR MUTUAL FUND
This is absolute wrong step taken by SEBI . 2.25% is very miniscule amount to be charged for financial service . There are other financial products which charge 20%-60% like insurance .How will a advisor survive ? It is a reasonable cost for any investor for a service ...Is there anything that is free of cost ????
Removal of entry load is applicable from 1st aug 2009
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