Brokerages plan revised cost structure for MF distribution

Brokerages plan revised cost structure for MF distribution

Distributors of mutual funds are planning to revise their transaction cost structure to attract investors as the charge for buying units in a mutual fund goes from tomorrow, something they believe will increase sales.

:-/

Distributors are now waiting to see whether asset management companies (AMCs) announce distribution commission for various MF schemes and on that basis they would charge advisory commission from customers.


On June 18, market watchdog Securities and Exchange Board of India asked mutual funds not to deduct marketing and distribution charges from the investment made by subscribers.


“Days of easy and guaranteed money for distributors are gone.

AMCs need to sacrifice their margins now and pay the distributors or they can mop up advisory commissions from investors linked to certain schemes.


However, the business of big distributors is unlikely to be hurt,” SMC Capitals Equity Head Jagannadham Thunuguntla said.


Distributors believe that although in the short term their revenue might be affected, in the medium to long term it would pick up as more investors come in. 🙂

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: