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MF Advisors Back In Action

Monday, August 05, 2013
By Anand Birai

After a phase of oblivion, mutual fund distributors and advisors are surfacing again. Don’t be surprised if your lost agent is back punching your doorbells to give you his advice. This is evident from the commission earned by mutual fund distributors that surged by 26% to Rs 2,367 crore in 2012-13, driven by improved market conditions, even as their number fell during the year.

According to latest data available with Association of Mutual Funds in India (AMFI), the total commissions earned by 332 distributors stood at Rs 2,367 crore in 2012-13, while banks such as Citibank, HDFC Bank and HSBC Bank topped the chart with highest commissions.

This was 26% higher than the total commission of Rs 1,883 crore given by the fund houses to their 373 distributors during the fiscal year 2011-12. Market participants attributed the spike in commission to better capital market conditions last fiscal coupled with measures taken by Sebi for the benefit of the sector. Interestingly, many distributors earned commissions despite net outflows of the investor money through their accounts. There were seven banks among the top-ten mutual fund distributors in terms of commissions paid to them.

As per the latest disclosure of commission and expenses paid by various fund houses to their distributors, Citibank led the list earning a commission of Rs 165 crore followed by HDFC Bank (Rs 160.88 crore), HSBC Bank (Rs 144 crore), NJ IndiaInvest (Rs 124 crore) and Standard Chartered Bank (Rs 88 crore).

Besides, there are four other banks among the top-ten commission earners - Standard Chartered Bank, Axis Bank, ICICI Bank and Kotak Mahindra Bank.
The commission paid to the top 20 mutual fund distributors went up by 23% to Rs 1,448 crore in the past fiscal ended March 31, 2013 from Rs 1,176 crore in 2011-12. During 2012-13, mutual funds’ assets under management (AUM) rose by a staggering Rs 1.51 lakh crore or an increase of 23% to touch Rs 8.2 lakh crore.

MF Updates
Tata Mutual Fund announces change in exit load structure under its schemes
Tata Mutual Fund has announced change in exit load under Tata Floating Rate Fund Long Term Plan and Tata Liquidity Management Fund (all plans and options) with effect from August 2. Accordingly, for Tata Floating Rate Fund Long Term Plan, the revised exit load will be 0.25% if redeemed on or before expiry of 30 days from the date of allotment and nil for Tata Liquidity Management Fund.

Reliance MF announces merger of Reliance Natural Resources Fund
Reliance MF announced the merger of Reliance Natural Resources Fund with Reliance Vision Fund. Accordingly, AMC has announced changes in the asset allocation pattern of the scheme. Post-merger, the scheme would invest 65% to 100% in equity related instruments and 0% to 35% in Debt and money market instruments. Investors will have an option to exit without payment of exit load from 8th August 2013 to 6th September 2013. The merger will be effective from 7th September 2013.

Tata MF announces dividend under Tata Balanced Fund
Tata MF has announced dividend under the monthly dividend option of Plan A and direct plan under Tata Balanced Fund. The recommended rate of dividend is Rs. 0.35 per unit under each plan on the face value of Rs. 10 per unit. The record date has been fixed as August 5.

Reliance Gold Savings Fund temporarily suspend the sale of units for subscription
Reliance MF has decided to temporarily suspend the sale of units for subscription in Reliance Gold Savings Fund, with effect from August 1.

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