The Association of Mutual Funds of India has suggested a two-way load structure for selling mutual fund products to investors comprising variable load and without any load.
Speaking on the sidelines of industry body Ficci's seminar here Association of Mutual Funds of India (AMFI) Chairman A P Kurian said the association has proposed what he called Plan A and Plan B.
Under Plan A, a variable load or commission could be charged depending upon the service or advice rendered by the distributor while under Plan B, there would be no load or commission charged to investors but the distributor would be compensated by the asset management company.
However, in that case, annual expenses charged to the schemes may need to be increased by 0.75 per cent, he said.
At present, investors need to pay a uniform commission of 2.5 per cent to distributors for mutual funds.
However, there is a view that the charges imposed on investors should be variable or linked to the extent of service rendered by the distributor.
The charges could be higher in case a distributor offers both service as well as advice, the quality of advice, etc., and charges could be less if the service rendered is minimum.
Speaking on the sidelines of industry body Ficci's seminar here Association of Mutual Funds of India (AMFI) Chairman A P Kurian said the association has proposed what he called Plan A and Plan B.
Under Plan A, a variable load or commission could be charged depending upon the service or advice rendered by the distributor while under Plan B, there would be no load or commission charged to investors but the distributor would be compensated by the asset management company.
However, in that case, annual expenses charged to the schemes may need to be increased by 0.75 per cent, he said.
At present, investors need to pay a uniform commission of 2.5 per cent to distributors for mutual funds.
However, there is a view that the charges imposed on investors should be variable or linked to the extent of service rendered by the distributor.
The charges could be higher in case a distributor offers both service as well as advice, the quality of advice, etc., and charges could be less if the service rendered is minimum.
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