Dear Friends,
I am in receipt of the latest circular with regard to the Fee Structure for ARN registration and renewal. It is a shocker to the entire Mutual Fund distributor community.
Currently, individuals and corporate employees are required to pay Rs250 as renewal fees. AMFI has drastically increased it to Rs2,500, which is a hike of 900%. However, an individual seeking a new ARN number will now have to shell out Rs5,000 as registration fees.
After the recent changes brought out by SEBI the earning of the MF distributor has come down by more than 80% but the latest fee structure announced by AMFI is seeing an astronomical jump of 900%. I dont understand the logic behind this move. This apart the distributor has to pay for the exam fee too.
Till date I was of the opinion that AMFI is an association which represents the cause of the mutual fund Industry. I was also of the opinion that AMFI is a non-profitable institution but the latest circular on fee chargeable for ARN registration and renewal from Amfi disproves this status.
When the industry is reeling under lot of uncerternity in terms of present and future business the MF trade body instead of finding ways and means to save the industry and its partners is trying to make profit from fee payable by its partners. Is this justifiable?
Already 32 % of IFA s are already out of the business, we are sure that amfi doesnt want more IFA's to be out of business.
It appears that the AMFI and the AMCs are working in tandem to wipe of intermediaries from the business of selling investments.
So long, the AMFI and AMCs needed us and now that they believe that they have fairly established their business and created a vast data base of investors, they are confident of selling investments comfortably, sending mails and news letters.
The ARN issued to the examinees (in this case the MF advisors) should be for life time of the advisor, as in any case, the advisor will keep himself posted of the developments in investment sector, else, he loses his clientle.
Is AMFI working so naive that they dont appreciate the contribution by the advisors?
With the mutual fund (MF) industry bogged down by a number of problems, the decision of the AMFI to hike ARN renewal fee is likely to prevent new independent financial advisors (IFAs) from entering the market. Needless to say that for the Bank and Institutional Brokers paying Rs. 5000/- will be peanuts. Besides it serves the purpose of killing competition to an extent.
Everyone were of the opinion the new team under Mr. Sinor will do something for the MF Industry but now they have done something for safe guarding their bottom line. Nobody is bothered about the nascent industry called Mutual Fund. In a scenario where there is no proper incentive for the distributor to market Mutual Fund products this move of Amfi will further kill the industry.
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