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Newrulewillhelpinvestorstoknow
aboutcommissionearnedbymutual
fundsdistributor
BySanketDhanorkar,ETBureau|Updated:Mar24,2016,10.03AMIST

SPOTLIGHT

PostaComment

READMOREONSIP|Sebi|Savings|MutualFunds|Invest
Budget2017

HealthandYou

MUMBAI:TheSebidictated'commission
disclosurerule'willbecomeoperational
fromOctober1andifyouinvestinmutual
fundsthroughadistributor,youarelikelytoknowtheexactamountofmoneyheis
makingoffyou.
Sebihasaskedfundcompaniestodiscloseinthehalfyearlyconsolidatedaccount
statement,thecommissiontheyhavepaidtohimduringthisperiod,includingpayoutsin
theformofgiftsandsponsoredtrips.

Arevaccinemakersinfluencing PMModihintsatlongterm
immunisationplan?
capitalgainstaxinbudget
Immunisationguidelinesaretweakedto
includeproductsofthefundingcompanies.
Paediatricians,inturn,getheftymargins,a
letterhasalleged.

Dependingontheamountofmoneyyouhaveputintotheschemetilldate,thiscouldturn

"Demonetisationisonlyashorttermpain
outtobeabigsum.Underthecurrentpractice,thispayouttothedistributorisneatly
foralongtermgain."Modivowedto
concealed,beingfactoredintothescheme'stotalexpenseratioshownasacertain
continuewithsoundandprudenteconomic
policiestoensureIndiasfuture.
percentageofthescheme'snetassets.Theexactsumisnotexplicitlystated.

PricesofHIV,diabetesandanginadrugs
slashedbyupto44%
AIIMSintroducesroboticarmfor
conductingneurosurgeries

However,thisamountisnowlikelytobereflectedinyouraccountstatementasa
standalonefigureinrupeeterms.SupposeyouinvestRs5,000everymonthinanequity
schemethroughasystematicinvestmentplan(SIP)fortenyears.Assumingareturnof
12%CAGR,theRs6lakhinvestedwillgrowtoRs11.62lakh.

Most
Read

Most
Shared

Consideringatrailcommissionof0.5%andupfrontcommissionof0.75%,yoursixmonth
accountstatementsduringthesetenyearswillreflectatotalcommissionpayoutof
roughlyRs28,207toyourdistributor.

Most
Commented

Youcouldearn1yearreturnofanFDinonedayin
equities:NileshShah
Keysectorsthatshouldmakemoneyforinvestors
in2017
Bankingsectorhasseenalotofstressdueto
demonetisation:NeelkanthMishra,CreditSuisse
SantamissedDStin2016top10stocksthatcan
givemultibaggerreturnsby19
Sugarstocksscriptedasweetstoryin2016some
maysurgein2017too
More

Thisworksoutto5%ofyourtotalinvestinggains.Additionally,theregulatorhasasked
fundhousestoprovideintheschemedocumentanillustrationoftheimpactofexpense
ratioonthescheme'sreturns.Thiswillbringouthowmuchtheinvestorwouldgainby
cuttingdownontheexpenseratio.
Thesemeasuresarebeingseenasastrongpushbytheregulatortoguideinvestors
towardsthedirectplanwhichcomeswithalowerexpenseratioasitdoesnotincur
expensestowardsdistributor'scommission."Theregulatoristellinginvestorstogowith
directplansinsteadofbuyingthroughthedistributor,"saysManojNagpal,CEO,Outlook
AsiaCapital.Goingdirectmayseemlikethe
prudentoption,giventhehighersavingsovera

h t t p ://e c o n o m i c t i m e s .i n d i a t i m e s .c o m /m a r k e t s /s t o c k s /n e w -r u l e -w i l l -h e l p -i n v e s t o r s -t o -k n o w -a b o u t -c o m m i s s i o n -e a r n e d -b y -m u t u a l -f u n d s -d i s t r i b u t o r /a r t i c l e s h o w /5 1 5 3 4 91 7 .

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periodoftime,butinvestorsshouldputthisnumber
incontextofwhatserviceshisdistributoris
offering.JayantPai,head,marketing,PPFAS
MutualFund,believes,"Ifinvestorsseevaluein
theservicesofferedbythedistributor,Idon'tthink
theyarelikelytogrudgethispayout."

NottobeMissed
US'abstainingatUNSC
despicable,shameful:Israel

DRDOsuccessfullytestssmart
antiairfieldweapon,can
targetenemyairfieldswithin
100kmrange

Checkfairmarketvalueofany
usedvehicle
SponsoredbyDroom

Fivegoodlookingbikes
launchedin2016

However,investorsmayshifttothedirectplanif
theycandowithoutadistributorandareateasewithadoityourselfapproachitrequires.
Ifnot,investorsmayseektheservicesofaSebiregisteredinvestmentadvisorwhowill
offerdirectplanswhilehandholdingthemthroughtheprocessforanupfrontfee.
Distributorstypicallyfetchatrailcommissionof0.30.75%onthevalueoftheinvestment
foreachyearthattheinvestor'smoneyremainsinvestedwiththefundcompany.
Thisiscalculatedonadailybasisasapercentageoftheassetsundermanagementof
thedistributorandispaidmonthly.Thisisapartfromanyupfrontcommissionthatis
usuallypaidbythefundcompanytothedistributoroutofitsownpocket.
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h t t p ://e c o n o m i c t i m e s .i n d i a t i m e s .c o m /m a r k e t s /s t o c k s /n e w -r u l e -w i l l -h e l p -i n v e s t o r s -t o -k n o w -a b o u t -c o m m i s s i o n -e a r n e d -b y -m u t u a l -f u n d s -d i s t r i b u t o r /a r t i c l e s h o w /5 1 5 3 4 91 7 .

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StartaZipSip.
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RecentMessages(32)

RiteshKumar

316

111daysago

PMNarendraModifavourshighertaxesfrom
marketparticipants
Advert:JoinusinCXORound
TableSeriesonProject
Management

Isavedthecountry,saysPM
Modiondemonetisation

TheproblemswithIndianare:Theyaretoomuchpricesensitive.Ifadistributor(Advisor)askfeefor
services&advisory.Peoplewillfleeaway.Howeverunknowinglytheycanpaycommission.Anywaythe
commissionfordistributorisnotthatmuchtomakeworrytoacustomer.Howeverconsideringtheservices
&guidancehe/sheprovidestohis/hercustomercommissionisok.
0

Reply

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Hendra
274daysago

DuetothissameproblemsIdidstoppedusingMutualfundrouteforanyinvestments.
0

Openafreedemat&trading
accountwithIIFL

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Hemanth
274daysago

whataboutinsuranceagentswhomakemuchmore!thereisnotransparencyhere.
SponsoredbyIIFL

Passengerremovedfromflight
aftermakingangryremarksat
IvankaTrump

RajBhalotia

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22749

275daysago

ok
0

SijuRajan

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5406

275daysago

great
0

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WhyanLPGcylindercostsRs3,000inManipur
Advert:BRICSandthenewemergingeconomic
order

Change
275daysago

h t t p ://e c o n o m i c t i m e s .i n d i a t i m e s .c o m /m a r k e t s /s t o c k s /n e w -r u l e -w i l l -h e l p -i n v e s t o r s -t o -k n o w -a b o u t -c o m m i s s i o n -e a r n e d -b y -m u t u a l -f u n d s -d i s t r i b u t o r /a r t i c l e s h o w /5 1 5 3 4 91 7 .

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AlittleofSharingCaring,AloveofendlessgivingtogetherAlittleofSharingCaring,Aloveofendless
givingtogether
0

AsusZenwatch3launchedin
India,startsatRs17,599

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BRVShanbhag

Flag

23447

275daysago

Itisimportantthateveryinvestorknowaboutthemoneythatgoestodistributorfromhisinvestments.Itis
betterthatinvestordirectlyinvestsinstockmarket.
1

Demonetisation:Thequeue
gettingshorterbutwalletisstill
light

Reply

ArchieAndrews

Flag

27646

275daysago

DataavailablewithdepositoryCDSLshowedforeigninstitutionalinvestors(FIIs)havesoldequitiestothe
tuneofRs20,780croresofarinFY201516
0

Reply

Flag

Reply

Flag

AKAE

3903
275daysago

goodinitiative
1

Demonetisationtooktheveilofftheseeminglywell
organisedworldofIndianprivatebanks
Advert:Strengtheningtrade,
investmentandfinancial
sectorcooperationamongst
BRICScountries

SyedMazheruddinMazher

2364

275daysago

wellgoodnoted
0

Reply

Flag

Poll
Doyouthinkratingagenciesareunfairwhenit
comestoassessingIndia'sfiscalstrength?
Yes

EasowSamuel

3320

275daysago

No

Ininvestmentsandininsuranceschemestoomanyinbetweenandthenadditionalreinsurance
companiesmaketheschemesdrivereturntothesaverandinvestornegligiblethesedays.Furtheronly

Can'tsay

thesaver/investortakestheloss.Theservicechargesaredeductedfortheinvestorevenonloss.

VOTE

Reply

Flag

DrRajeevJoshi
275daysago

Willthiscurtailundiscloseddiversions?
5

Reply

RahulPriyadarshi

Flag

9578

275daysago

it'sgood
0

Reply

NeoSvr

7894

Flag

275daysago

seemsgood
0

PranabKumarDas

Reply

Flag

23262

275daysago

h t t p ://e c o n o m i c t i m e s .i n d i a t i m e s .c o m /m a r k e t s /s t o c k s /n e w -r u l e -w i l l -h e l p -i n v e s t o r s -t o -k n o w -a b o u t -c o m m i s s i o n -e a r n e d -b y -m u t u a l -f u n d s -d i s t r i b u t o r /a r t i c l e s h o w /5 1 5 3 4 91 7 .

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a b o u t c o m m is s io n e a rn e d b y m u tu a l fu n d s d is trib u to r - T h e E c o n o m ic T im e s
ConsumerHasTheRightToKnow.NotAgreedToDhirendraKumar,CEOValueResearch.TheTruthIs
Bitter
0

Reply

Pratimamit

Flag

99

275daysago

Therecannotbeanyfreelunch.
0

Reply

PranabKumarDas

Flag

23262

275daysago

Caught&Bowled
0

Reply

AnnuMallya

Flag

22455

275daysago

Yesbutalsonota56coursemealattheinvestorscost!Again,remember,irrespectiveofgainor
lossbyinvestor,distributorgetshiscommissionatinvestorscost.Feebasedapproachwouldbefar
betteryouseeWHATandHOWmuchyouarepaying.
0

Reply

Flag

BharathChowdary
275daysago

goodtohaveaknowledgeaboutlooters
1

Reply

Pratimamit

Flag

99

275daysago

Iftheyarelooters,whygotothem?
0

Reply

Flag

BharathChowdary
275daysago

lackofknowledgeandtime
0

VijayKamat

Reply

Flag

4087

275daysago

VERYGOODMOVE.NoweverySEBIofficialsincomeshouldbedisplayedwhentheycomeonTVand
Newsprint.Weshouldknowhowmuchtheycosttaxpayers.
2

VenkatB

Reply

Flag

21289

275daysago

lootershavereasonandwaystolootfrominvestors
2

PrakashNaik

Reply

Flag

30342

275daysago

Thisisgood
1

Reply

Flag

h t t p ://e c o n o m i c t i m e s .i n d i a t i m e s .c o m /m a r k e t s /s t o c k s /n e w -r u l e -w i l l -h e l p -i n v e s t o r s -t o -k n o w -a b o u t -c o m m i s s i o n -e a r n e d -b y -m u t u a l -f u n d s -d i s t r i b u t o r /a r t i c l e s h o w /5 1 5 3 4 91 7 .

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1 2 /2 5 /2 0 1 6

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ru le w ill h e lp in v e s to rs to k n o w

a b o u t c o m m is s io n e a rn e d b y m u tu a l fu n d s d is trib u to r - T h e E c o n o m ic T im e s

KamalAgrawal

51046

275daysago

RateofcommissionisexorbitantlyhighinInsuranceSectorWhynottheybringinsuranceunderthisnet&
tellinsuredhowmuchcommissionispaidtoagent
2

Reply

Flag

PranabKumarDas

23262

275daysago

IfLICCouldReduceCommissionTheMFsShouldSweatToEarnTheirBread.TheyWereFooling
ThePublicAllThisWhile
0

RaviKrishna

Reply

Flag

2566

275daysago

GoodstepbySebi,Verymuchinformative
1

Reply

Pratimamit

Flag

99

275daysago

Nowpeoplecaninvestonthebasisofcommissionreceivedbytheagent.Lessthecommission,
betterthefund.
0

Reply

DullaCSekhar

Flag

32068

275daysago

5kovermanyyearsfor29lacinvestmentisnotmuchofapain.Worthit.
0

Reply

SadanandaHalageri

Flag

1013

275daysago

Morethetransparency,thebetteritwouldbeforallconcernedandthisisparticularlysofortheinvestors.
SEBI'sinitiativeisawelcomestep.
0

Skocherla

Reply

Flag

3489

275daysago

Longoverdue.Therearefewbrokerswhotakethetimetohelpbutmanyarejustlivingofftheinvestors
doingnothingotherthantakingachequetothefundhouseandrecommendingfrequentchurningof
portfoliostogetmoreupfrontcommission.
0

Reply

Pratimamit

Flag

99

275daysago

Thatwasinthepast.Nowadayschurningisnotprofitabletoagents.
0

SachinGupta

Reply

Flag

6640

275daysago

goodmove
0

Reply

Flag

h t t p ://e c o n o m i c t i m e s .i n d i a t i m e s .c o m /m a r k e t s /s t o c k s /n e w -r u l e -w i l l -h e l p -i n v e s t o r s -t o -k n o w -a b o u t -c o m m i s s i o n -e a r n e d -b y -m u t u a l -f u n d s -d i s t r i b u t o r /a r t i c l e s h o w /5 1 5 3 4 91 7 .

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1 2 /2 5 /2 0 1 6

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a b o u t c o m m is s io n e a rn e d b y m u tu a l fu n d s d is trib u to r - T h e E c o n o m ic T im e s

SureshHanamshet

446

275daysago

IhadinvesmentinICICIPrudential,theamountremainedwiththemfornineyearsandtheymaderupees
teninvestedtorupeesseven.Evenwhenthiswastobewithdrawntheysaidkeepforonemoreyearwe
willtrytomakeuptoRs.ten.AllthismoneyisspentbytheM.F.managersontheirredcarpetedair
conditionedofficesandwhatnot.ItisbetternottofallpraytotheseMutualfundswhichsystematicallyrob
you.
3

Reply

Pratimamit

Flag

99

275daysago

Donoteverinvestinmutualfunds.
0

GetaQuote

Reply

Flag

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h t t p ://e c o n o m i c t i m e s .i n d i a t i m e s .c o m /m a r k e t s /s t o c k s /n e w -r u l e -w i l l -h e l p -i n v e s t o r s -t o -k n o w -a b o u t -c o m m i s s i o n -e a r n e d -b y -m u t u a l -f u n d s -d i s t r i b u t o r /a r t i c l e s h o w /5 1 5 3 4 91 7 .

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