Comment on Introducing Coin - our Direct Mutual Fund Platform
commented on
28 Mar 2017, 03:25 PM
TGhe Nitin’s statement may even be an understatement. Here is an example:
This amount ranges from Nil (eg. gilt funds, arbitrage funds and liquid funds) to 4.00% (eg. Tax plans). But for an generic equity scheme, the distributor gets around 0.50% to 1.00% commission up-front as one time brokerage.
Trail commission
Most of the equity schemes offer 0.50% to 0.75% trail commissions. Some long term plans like Child care plans offer 1% trail commission. The amount of trail is less for debt funds (about 0.25% to 0.50%) and even less for liquid funds (about 0.05%).
Additional Payout for B15 Business
If the buyer is from a smaller city (out of top 15 cities), most mutual funds offer additional 1.5% brokerage on equity schemes, about 0.75 % to 1.4% on hybrid schemes and 0.50% on debt schemes. This is an additional payment other then the one time brokerage and trail commission.
Following is a picture of commission structure for ICICI Prudential Mutual Fund for equity schemes.
Given below is the picture showing you commission for hybrid and debt schemes.
Please note that these commissions are not always fixed. Every once a while, fund houses try to promote some specific schemes and pay about 1% to 2% extra commission to get investment from investors in that scheme.