SEBI has been working for you, the investor, and how
SEBI has been pushing the pedal on protecting your, the investor’s, interest. It has taken several steps to eliminate conflict of interest between your adviser/distributor and you. This is specially true for mutual funds.
As a first step, in 2009, it banned upfront commissions on sale of mutual fund products.
Then in 2013, on its behest, mutual funds introduced direct plans of all their mutual fund schemes. In my view, this was the best thing to happen. Direct Plans means no commissions paid out to anyone and all the resultant savings adding up to an investors returns.
In contrast, regular plans are sold by distributors where they receive regular commissions as a % of the marked value of your investments.
Further, in the same year, that is 2013, SEBI also introduced the Investment Advisers (IA) Regulations 2013.
Simply put, any advisor who is offering one to one investment advice to investors related to securities, etc. must register as an Investment Adviser.
As per SEBI Investment Adviser regulations, “investment advice” means advice relating to investing in, purchasing, selling or otherwise dealing in securities or investment products, and advice on investment portfolio containing securities or investment products, whether written, oral or though any other means of communication for the benefit of the client and shall include financial planning.
Did you know this?
