AMFI wants direct line with independent financial advisors

The Association of Mutual Funds in India (AMFI) has expressed its desire to open a proper communication channel with independent financial advisors.

The AMFI has asked independent financial advisors (IFA) to form a body of their own that can regularly interact with AMFI to air their grievances to address distribution-related concerns of fund houses.

“Distribution is a grey area for us,” said Mr H.N. Sinor, Chief Executive, AMFI, at CII's annual mutual fund summit on Wednesday. “We do not have any kind of structured interaction with banks or the IFA community.”

“Persistency is another challenge that the industry faces today,” said Mr Milind Barve, Chairman, AMFI, at the summit.

On the issues plaguing the mutual fund industry, Mr Barve said that what the industry needed foremost was an image change.

“A lot of things are being said about the industry today, but hardly any good word. There is hardly any notice of the positive contribution done by the fund houses,” said Mr Barve.

He clarified that fund houses had not built their institutional business at the cost of their retail business and hence the grouse was not valid.

The AMFI had decided that each fund house will conduct five investor awareness programmes every month, and 2,000 such events will be held in a year.

In 2010-11, 26 AMCs conducted 5,817 investor awareness programmes covering 280 cities and 3,40,383 participants. This fiscal, 19 AMCs have covered 115 cities, conducted 1,123 investor awareness programmes reaching 30,589 participants.

The AMFI is planning to launch a media campaign as a means of reaching the investor. “A film on investor awareness made on a budget of Rs 8 crore will start airing on television screens by mid-July,” said Mr Sinor.

Based on the response to the campaign, another educational series for investors will be launched.

The AMFI also plans to come out with voluntary guidelines for investor protection though it was too early to talk about it, said Mr Sinor.

Mr Barve said that too much dependence on regulation and ‘obsession' with SEBI was a concern.

“There are many things that we need to do ourselves. We need to see what we can do without regulatory intervention.”

Source: http://www.thehindubusinessline.com/markets/stock-markets/article2126413.ece