Mutual Funds Agent Commission will Suffer - SEBI

Mutual Funds Agent Commission will Suffer – SEBI

SEBI says that,

Concerned over large-scale outflow from mutual fund schemes , market regulator SEBI wants fund houses to invest part of their profit on cementing ties with investors and curtail commissions and freebies to agents.
Market watchdog SEBI, which also oversees mutual funds, is of the view that fund houses can improve their commission bargaining power by working on consolidation in the distribution network and bringing down the number of agents and distributors.

This is really a good move by SEBI. Once upon a time in India, the mutual funds were highly mis-selling products. This is because the entry load of 2.5% in any mutual fund was going to the Agents and distributors as a commissions.

In fact, many mutual fund agents and distributors had made fortunes out of it. However, now SEBI completely wants to finish this agents and distributors business.

And as a first move, just few years back, SEBI totally abolished entry load of 2.5%. So now you can invest in any Indian mutual fund with 0% Entry load.

And now, SEBI wants that investors become financially aware and choose their own mutual funds by themselves. And that’s why this time SEBI wants to kill the entire agents and distributor network among all over India.

This is really a good move by SEBI. In my opinion, its time to get financially educated. Everybody should learn how to select mutual funds by him/herself.

Because its the basic financial education.