Ahmedabad, Sep 12 (UNI) The Consumer Education and Research Centre (CERC) here has welcomed the Securities and Exchange Board of India proposal to waive the entry load for direct application to mutual funds and congratulated the Board on its pro-investor move.
The proposed move will offer a huge saving to direct investors, the CERC said in a release here today. The practice of paying large fees and distributing goodies to distributors is always at investors' collective cost, the release said.
In all equity schemes, Asset Management Companies (AMCs) are allowed to charge up to 2.50 per cent to meet management fees and expenses. Of this, typically, around 1 per cent goes to meet the recurring selling commission to the distributor. Similar to waiving the entry load, the AMCs should also reduce the expenses charged, by at least 1 per cent per annum in respect of those investors who invest directly, the release said.
CERC supports Sebi's move and urges the regulator to withstand the pressure from the Mutual Funds industry which is gearing to lodge a protest, the release said.