23 December,2010 07:12 AM IST | | A Correspondent
Overwhelming majority of independent financial advisors prefer tailor-made regulations to improve business environment
A recent survey of 373 Independent Financial Advisors (IFAs) across the country conducted by Cafemutual an information company focusing on financial service distributors indicated that an overwhelming majority of IFAs preferred regulations specifically framed to improve their business environment.
While 95 per cent of IFAs were in favour of being regulated, 61 per cent felt it would help to raise the standards of the financial advisory business.
Their agencies of choice were AMFI (38%), followed by SEBI (27%) and a self-regulatory body of distributors (21%).
Seventy per cent of survey participants felt that the stance of the mutual fund industry on entry load ban was unsupportive of IFAs, while 42 per cent said that they have begun charging their clients a fee.
Another 12 per cent said that they had stopped selling mutual funds altogether and 36 per cent said they had not changed their approach.
Interestingly enough, only 26 per cent of IFAs said that the new SEBI chairman would reverse the decision.
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While 69 per cent felt that media coverage of IFAs has been unfair, only 30 per cent felt that it had a negative impact on their business.
Participants responses on fund selection indicated that they felt commissions paid to IFAs influenced the way schemes are marketed and around 57 per cent said that the commission structure was very influential in marketing products.
Sixty five per cent of IFAs said that well performing equity funds were also seen as having highest acceptance among clients. Only four per cent felt that debt funds have the highest acceptance among their clients.
Thirty six per cent felt that portfolio quality is the main criteria in recommending schemes, 24 per cent felt that the reputation of the fund manager was important and absolute returns were important to another 24 per cent.
Around 44 per cent of IFAs considered banks as their biggest competition, followed by online transaction platforms (39%) and stock exchange platforms (17%).
When asked what services they extend to their clients, 71 per cent of IFAs said that they draw up and execute plans based on client needs.
Media Impact
69% IFAs feel that media coverage has been unfair, only 30% feel that it has a negative impact on business
