Distributor body asks mutual funds to absorb the cuts in fee

In September, Sebi had capped the maximum limit on expense ratio at 2.25 per cent, from the earlier 2.5 per cent

The Foundation of Independent Financial Advisors has urged mutual funds (MFs) to absorb the cuts arising from the change in total expense ratio (TER) and not pass them on to distributors. 

In a letter to the Association of Mutual Funds in India (Amfi) on Wednesday, Fifa said: “... as far as the distribution community is concerned, similar economies of scale (like in MFs) at the distributor level has not been reached, given that the coverage and scope of the individual distributors is very limited.”

“If a distributor brings new business, there is a variable cost attached to it. The more clients you