Source: The Hindu Business Line
Excerpt: SEBI’s new rules requiring MFs to quantify distributor commissions will help investors. But what about other financial products?
The lack of any distinction between ‘agents’ who earn their commissions from financial firms, and ‘advisors’ who provide impartial counsel to investors for a fee, has for long been the bane of the Indian financial products industry. The Securities and Exchange Board of India (SEBI) has been fighting a lone battle in trying to fix this malaise, by requiring full-fledged mutual fund ‘advisors’ to register with it, eschewing commissions from fund companies. But investors have so far shown little inclination to make this transition. SEBI’s circular last week, asking for higher commission disclosures from mutual funds, seems to be the latest attempt to tighten the screws on the agent model.
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