? Cool Title, but what’s the news?
Many distributors move their customers frequently from one scheme to another to keep commissions flowing, with little regard for their ability to handle risk. This is Sebi’s second major bid to curb mis-selling in India’s ₹23.40 trillion asset management industry.
? Okay, but what does it mean?
The Securities and Exchange Board of India (Sebi) plans to cap lifetime distributor commissions for fixed-income schemes at 1.5-2% and equity-oriented mutual fund schemes at 4-5% so that upfront commissions too come down automatically, the people mentioned above said on condition of anonymity.
? Why should I care?
Because Mutual Funds are growing big in India, and are lucrative to all classes of investors. And because if you are investing in a regular mutual fund plan, this commission is going out of your pocket!
Maybe, it’s time to switch to direct, or keep a lookout for the best plans that suit your goals!
Source: Livemint
