Capping of commissions alone may not work in stopping mis-selling
I recently read that the Securities and Exchange Board of India may be planning to cap distributor commissions in mutual funds. While the market regulator is rightly concerned about mis-selling, there exist some systemic issues connected to commissions, which need to be addressed alongside. As a financial educator, I meet mostly retail investors at my sessions. There are some who are already investing but a majority of participants are those who have not yet invested in MFs and want to start now but with smaller amounts. The preferred investment is in an equity fund SIP. Every session I conduct only reiterates what I have been saying all along, the retail investor has no access to advice.