Pension regulator PFRDA will go in for a ‘fee-based’ model for ‘Retirement Advisors’ while finalising regulations for them in next few months, said Chairman Hemant Contractor.
The appointment of ‘retirement advisors’ is expected to ensure last mile outreach to NPS subscribers and help them in choosing fund managers and investment products.
“Increasingly important aspects of NPS such as choice of fund managers and investments are being left to the subscribers themselves. They need some sound advice on investing their funds. Retirement advisors will come in handy as they would give professional advice to people and help them in making the right choices,” Contractor told BusinessLine here.
Asked whether the Pension Fund Regulatory & Development Authority (PFRDA) would allow commission or fee-based model for compensating the ‘Retirement Advisors’, he said that a fee-based model would be prescribed.
The concept of distributors is not prevalent in the case of NPS even as mutual funds and insurance sectors are allowed to engage agents for distribution of products.
“We have now got feedback from stakeholders. Roll out of retirement advisors will happen in couple of months,” he added.
‘Retirement Advisors’ are expected to play a major role in popularising the National Pension System (NPS).
The upcoming regulations on retirement advisors are expected to provide a framework for their eligibility, registration process, fees and also define the scope of work and responsibility. PFRDA has already sought public comments on the draft regulations for retirement advisors.
According to the draft, an individual, firm or corporate body acting as a retirement advisor on NPS would have to obtain a certificate of registration from the PFRDA.
The individual, proprietors, partners and representatives of a retirement advisor should at least be graduates, says the draft regulations.
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