Individuals can now promote pension merchandise: PFRDA chairman

To improve the penetration of the National Pension System (NPS), particularly in tier-I and tier-II cities and to succeed in out to all segments, the Pension Fund Regulatory and Development Authority of India (PFRDA), has now allowed people, together with NPS subscribers, to develop into distributors of pension merchandise.

The regulator had earlier allowed banks and level of presence-service suppliers (POP-SPs) to work as pension product distributors. As a part of the most recent transfer, POP-SPs will empanel people in search of to develop into pension product distributors as per PFRDA tips. “Direct licensing is not going to be offered to those particular person advisers by PFRDA. It will probably be given to them below POP-SP laws, PFRDA chairman Supratim Bandyopadhyay instructed Mint. “PFRDA will present broad tips to POP-SPs who want to take people with them (as a pension adviser) and permit these people to stroll within the area and procure pension merchandise.”

Bandyopadhyay additionally clarified that the method to get pension merchandise distributed or offered by particular person advisers is left to the discretion of POP-SPs. POP-SPs are free to determine on whether or not to empanel people to promote pension merchandise.

Also, much like the mutual fund and insurance coverage industries, there isn’t a cap on empanelling particular person advisers below a POP-SP.

The collection of people will probably be made on particular grounds. “PFRDA will give broad tips on the choice course of to POP-SPs. To get them empanelled, modifications have been made in POP-SP laws,” mentioned Bandyopadhyay.

Bandyopadhyay additional mentioned that PFRDA continues to be taking recommendations from POP-SPs (which have tie-ups with different insurance coverage corporations) to determine on how particular person advisers can get their commissions paid.

Additionally, steps have been taken to forestall the misselling of pension merchandise.

“Like within the case of the insurance coverage business, the proliferation of merchandise can provide rise to misselling. Fortunately, now we have solely two merchandise (NPS and Atal Pension Yojana). So, by giving correct coaching to those particular person advisers, who get empanelled below POP-SPs, we will curb misselling. Since NPS is a market-linked product, subscribers must get correct steering from advisers. Advisers ought to inform subscribers that they shouldn’t depend on the previous efficiency of funds.”

For an act of omission, negligence, the POP-SPs will probably be held accountable, simply as in case an insurance coverage agent makes any inadvertence, the insurance coverage firm is chargeable for that act. Similar rules will apply with regards to the distribution of pension merchandise by particular person advisers by way of POP-SPs, mentioned Bandyopadhyay.

Subscribe to Mint Newsletters * Enter a sound electronic mail * Thank you for subscribing to our e-newsletter.

Never miss a narrative! Stay linked and knowledgeable with Mint.
Download
our App Now!!