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Individuals should be encouraged to invest directly if they can manage it on their own, says Ajay Tyagi, chairman of Sebi.
The chief of country’s market regulator was talking to reporters at the sidelines of AMFI Mutual Fund Summit 2018.
"There is a strong case for direct plans.
AMFI should promote them to check mis-selling in mutual funds,” he said.
“For those who can’t, they should obviously look for help but we need to keep the direct investments accessible for the aware investors, “he added.
Many financial planners and mutual fund distributors say it would be disastrous to leave the investors on their own in a still developing industry like ours.
"If we promote direct investing to new investors, they most definitely will flee the market in times of volatility and market falls," said Santosh Mishra, founder and CEO, Vashishtha Capital.
NS Venkatesh, CEO of AMFI, maintains that direct investing should be encouraged but only among those investors who are aware.
"We through our campaign, 'MutualFundSahiHai’, not only encourage investing, we also propagate the message that if you don't know then seek help," said NS Venkatesh.
According to AMFI data, the AUM of equity schemes has doubled in the last two years.
There has been a huge influx of new investors into the mutual fund fold after demonetisation.
Sebi and AMFI through their campaigns are in process of minimising mis-selling to the new investors.
"For the tech savvy new investors, who understand risk and mutual funds, it's always a good opportunity to go direct with their investments but this doesn't mean that we should move away from distributors and advisors.
We, at AMFI, will be monitoring the mis-selling and freebies like travel trips to the distributor committee to ensure that the mutual fund investors have a good experience," says Venkatesh.
