Regulatory changes and technology cannot challenge the role of independent financial advisors (IFAs) in the mutual fund industry, conceded speakers at the recent Business Standard Smart Business panel discussion on ‘Expending Earnings of IFAs & Impact of Recent Regulatory Changes on the Mutual Fund Industry’ organized in association with Independent Consultants & Advisors Association (ICAA) in Kolkata.
A recent circular by Sebi, effective October, mandates disclosure of absolute amounts of commissions paid by funds to distributors. Debashish Mohanty, country head and executive vice president, retail, UTI AMC, said that the mutual fund industry was not mature enough to accept the regulation. If implemented, the regulation would not lead to any threat to the business of IFAs, he added.
Speakers also agreed that the advice of IFAs was indispensable in the mutual fund industry.
“What matters is the quality of advice. If the advice of the IFA is strong, an investor will not bother to pay him a little commission for the same,” said Swarup Mohanti, CEO, Mirae Asset Global Investments.
“Everything can be digitised, but nothing can replicate the personal attention of the IFAs,” said Manoj Sinha, zonal head, SBI Mutual Fund.
Further, with changing times, people have understood the need to invest in instruments like Systematic Investment Plans (SIP) and mutual funds, which has led to demand for more IFAs, said Anirudha Chaudhury, vice president at ICICI Prudential AMC.
“There is no threat to the profession of IFAs, and their services are irreplaceable,” said V Ramesh, former deputy CEO, AMFI.