ICICIdirect today launched an exlcusive trading facility for Independent Financial Advisors (IFAs), with a view to provide them a cost-effective online platform in the backdrop of changed market scenario.
IFAs had seen an impact on their business after the recent Sebi decision to remove entry loads on mutual funds, and stock exchanges started offering facilities to transact mutual funds (MFs) through their platforms.
The new service, which is cost-effective, will help IFAs to revive their business and can be availed by any AMFI certified-IFA having minimum one year experience paying nominal charges, ICICI Securities Executive Director, Anup Bagchi told reporters here.
"The ICICIdirect platform will facilitate investments by drastically reducing the time and cost to process. This will also help IFAs serve their customers better through value added free services like advisory and SMS alerts," Bagchi said.
ICICI Direct is the online broking arm of ICICI Securities, which is a subsidiary of country's second largest lender, ICICI Bank.
Besides, the new platform will allow IFAs to enroll in the new platform and provide research and advisory to their customers, Bagchi said.
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Noting that the recent regulatory changes like removal of exit loads and online trading of mutual funds have impacted the business of IFAs, Bagchi said that there was a need for IFAs to adopt cost-efficient processes and professional advices.
Presently, there are around a lakh of Association of Mutual Funds in India (Amfi) certified distributors serving about 4 crore folios, with an equity asset under management (AUM) of around Rs 2,00,000 crore, Bagchi said, adding that of this nearly 35 per cent of AUM is being serviced by IFAs.
On becoming a member, the IFA enjoys several benefits like significant reduction in expenses, complete ownership of his customers and able to provide several value added services like portfolio tracker, SMS alerts, various non-equity financial products to his customers, Bagchi said.
IFA can also provide ICICIdirect professional advisory on mutual funds to his customers. This advisory tracks various schemes, rates them as well as recommends a buy/sell/hold strategy.
ICICIdirect hopes to offer gamut of other products to sub-brokers and IFAs to do brisk business, Bagchi said.
Bagchi pointed out that 65 per cent of savings still go into banks saving, 25 per cent goes into insurance and little goes into equities. There is a need to allocate more and more funds towards equity, he said.
Commenting on extended trading hours in the market, Bagchi said, "we see that alignment of our's with the global markets is a healthy trend."