InvestorQ : Can investment advisors also sell mutual funds to customers? What is the latest SEBI stand on that subject?
Angel dcosta made post

Can investment advisors also sell mutual funds to customers? What is the latest SEBI stand on that subject?

Answer
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Anamika Sodhani answered.
7 months ago


This subject was debated in the SEBI Board meeting that was held on 17th February. In its board meeting on 17th February, the SEBI decided to separate the function of advisory and marketing in the case of investment advisors. There would be now clear Chinese walls between the two.

However, for simplicity, the advisors are allowed to recommend and also execute mutual fund schemes provided they are restricted to Direct Plans only. This will avoid advisors recommending mutual fund churn just to earn commissions.

In addition, SEBI has also suggested capping the fees paid to investment advisors to avoid any performance based incentive, either directly or indirectly. SEBI expressed reservations even in the past and this report had been put up for public comments about 3 months back. This decision is an outcome of the feedback received on the report.