NEW DELHI: An association of mutual fund agents has suggested markets regulator Sebi to allow distributors to give incidental advice to investors, terming it an essential component needed by customers to buy products.Markets regulator Sebi, in October, came out with a consultation paper, wherein it proposed mutual fund distributors should not be allowed to provide incidental investment advice with regard to mutual fund products.As per the proposal, distributors providing such advice would have to register under Sebi's IA Regulations. Sebi has sought comments on the proposal till November.United Forum, a forum of various distributor associations across the country, believes that the proposal would gravely affect the service mechanism of distributors and would be harmful for investors. It would be detrimental to the growth of the mutual fund industry as investors can move to unproductive assets. Such a hybrid model is present in the Unites States.The forum is of the view that the proposal would be detrimental to the growth of the mutual fund industry. "Not only the existing mutual fund assets can move to unproductive assets like gold , etc but the new growth and assets which were to come to the industry will get impacted," the forum noted.

Source: Economic Times January 15, 2017 06:24 UTC