Mutual fund industry body Amfi has decided to extend the fee waiver for new distributors from September 30, 2013, to March 31, 2014, with a view to attract more distributors. Amfi had earlier decided to extend the fee waiver for new distributors from June 30 to September end this year.
The fee waiver assumes significance at a time when the industry is struggling to attract distributors to sell MF products. At present, the number of independent financial advisors (IFAs) stands at about 49,000, while corporate distributors number about 6,000. In contrast, the insurance industry has about 2.5 million agents selling insurance products.
The fee waiver is especially targeted at the ?new cadre of distributors? that was formed by Sebi in September last year. The new category, which allows personnel such as postal agents and retired government officials to sell units of simple MF schemes, has got a lukewarm response, with just about 1,000 people signing up under this category in the last one year.
?It?s a welcome move considering that there are not enough incentives for distributors to sell MF products,? said Ramesh Bhat, founder-president, IFA Galaxy, a body of independent financial advisors. ?At least now the registration will be free, and the distributor can opt to pay fees and renew his registration after a year if he gets enough assets.?
As per rates put up on Amfi’s website, individuals have to pay R3,000 for the Amfi registration number (ARN), while the new cadre of distributors has to pay R1,500 for the registration. This fee has been waived off till the end of March next year. For ARN renewal, individuals have to pay R1,500, while the new cadre of distributors has to shell out R750.
?This initiative will help us attract feet on street in tier-II and tier-III cities,? said V Ramesh, deputy CEO, Amfi.