AMFI allows distributors to earn trail commission on switched AUM
₹52 lakh crore. “This will ensure that only genuine requests are likely to be initiated as there is no instant gratification for anyone in this," said Amol Joshi, a mutual fund distributor and founder of PlanRupee Investment Service.
The circular also said, “The payment to the new (transferee) distributor shall be based on the lower of the commission rate (as applicable on the date of change of the distributor code) of the transferor and transferee distributor." It also said any payments other than the trail commission, including incentives or commissions made on the account of change of distributor code, will not be allowed. “There have been practical instances of distributors changing profession, the investor relocating to another city, or simply a break in the investor-distributor relationship.
In such cases, the investor still wishes to see the portfolio managed by one entity, i.e. the new distributor.
Servicing such a request was non-remunerative so far. This has been fixed by this circular," added Joshi.Milestone Alert!
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