Sebi's cuts for MFs to be costly affair for new distributors, smaller AMCs

Distributors fear that once again they will have to do the heavy lifting as the industry tries to absorb these cuts

The Securities and Exchange Board of India's (Sebi's) recent move to cut expense ratios and ban upfront commissions could come as a heavy blow for new distributors and smaller fund houses -- the categories the regulator would like to see grow. Experts warn that individual investors could also miss out on access to advice if advisors don't find mutual fund distribution to be a viable business.    

According to the chief executive officer of a mid-sized fund house, while larger fund houses should be better-placed to absorb the overall cut in total expense ratio (TER), the impact could be