Statutory Disclosures
Please create three separate drop down menus as under:
- Disclosure of income from investment products;
- Code of conduct for Mutual Fund Distributors
- Risks related to investments
Disclosure of income from products:
Mutual Funds:
EquiZen is a mutual fund distributor registered with the Association of Mutual Funds of India (AMFI) under the name of Sanjay Parikh. Our ARN code is 272487. AMFI is an industry association of all the mutual funds in India. AMFI regulates the distribution of mutual funds and lays down the rules and regulations and code of conduct that all distributors of mutual funds have to adhere to. Mutual Fund distributors earn commission from the Asset Management Companies (AMC) that manage the schemes recommended by them to their distributors. There is no up-front commission paid by the AMCs to the distributors. The entire commission is paid as a trail commission. An example of the same is as under:
Let’s say that a customer has invested Rs 100,000 at the beginning of the year. The amount at the end of the year is say Rs 115,000. Assuming that the AMC is paying 0.75% as trail rate of commission and the average assets are Rs 107,500 in the entire year, the AMC will pay an amount of Rs 806 for the year. This is actually computed and paid every month on the actual average AUM for each month. The rates normally paid by AMCs to distributors differ based on the AUM of each scheme as also the type and the assets that are invested into by the scheme. Generally, Equity schemes pay a higher rate than other schemes which may not be true in case of very large schemes. The rates generally paid for different schemes is as under:
| Equity schemes | Debt schemes | Liquid schemes | Index schemes | |
|---|---|---|---|---|
| Rates paid by AMCs | 0.5% – 1.75% | 0.15% – 1% | 0.05% – 0.15% | 0.05% – 0.5% |
Note : These are just broad ranges of the rates that the AMCs may pay to Distributors. It is possible that some AMCs may pay a rate higher or lower than the rates mentioned above. Generally, the difference in the Total Expense Ratio between Direct and Regular plans of schemes is the average rate of commission paid by the AMC. If you want to know the exact rate earned by us for a particular scheme, please write to us. The trail rates received by us from different AMCs can be found here. Post a link to an excel sheet here.
Other products:
EquiZen is currently not empanelled with insurance companies and banks. We are empanelled as distributors of foxed deposits with Shriram Finance Ltd and Bajaj Finance Ltd. We also have a tie up with certain large financial products distribution companies. These companies may share the income that they earn from the products that you buy through them with us. Typically, the income is up-front and highest for life insurance products followed by health and other insurance policies. For investment products such as bonds/debentures, fixed deposits, etc, the earnings range from 0.25% to 2.5% on an up-front basis. We may also get a part of the fee if we are involved in arranging a loan for you.
While we have made a fair disclosure of the income that we will earn from the products in which you invest, please be assured that our priority will be to recommend only those products that are suitable and are required by you. The income that we earn from them will not be a driver for our recommendations. For any clarifications, please call or write to us.
CODE OF CONDUCT FOR MUTUAL FUND DISTRIBUTORS
A link to the AMFI code of conduct for mutual fund distributors is given below:
https://www.amfiindia.com/downloads/revised-code-conduct-of-inter-mf
RISKS RELATED TO INVESTMENTS
Mutual Fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements while choosing a scheme or schemes.
All investments in equity securities are subject to market and company specific risks. One can reduce company and sector specific risks by diversification. However, market related risks cannot be diversified away.
Fixed income investments are subject to credit risk as well as interest rate risks. Credit risk is the risk that the interest and/or the principal may not be paid on due date/s. Interest rate risk refers to the fluctuations in the market price of fixed income securities due to changes in interest rates in the economy. Market prices of fixed income securities are inversely related to movements in interest rates. When interest rates fall, market prices of fixed income securities rise and vice versa. This does not affect fixed deposits since the same are not traded.
The above are some of the risks that affect investments. Other risks are also prevalent which are not discussed here.