Mutual Funds to try decoys to stop mis-selling

New Delhi: To check mis-selling of mutual funds and ensure compliance with norms, fund houses have begun using ‘mystery shoppers’ to catch errant agents and also to get feedback from investors. Mystery shoppers are typically representatives of fund houses who pose as ordinary investors while dealing with mutual fund distributors.

Executives at various mutual funds said ‘mystery shopping’ method can be an effective way to check mis-selling, which has always been a major concern for the industry. However, the system can succeed only if it is done by independent entities and their analysis needs to be taken seriously.

“The ‘mystery shoppers’ method can give some kind of essence. It can help in providing you what is happening on the ground. We at Reliance Mutual Fund are already using this technique to get feedback from investors,” Reliance Capital Asset Management CEO Sundeep Sikka said.

Mr Sikka, who is also chairman of the industry body AMFI, said different fund houses are using different techniques in these areas. Quantum Mutual Fund CEO Jimmy Patel too said, “Mystery shoppers can be used to reduce mis-selling in mutual funds... It can become successful provided that these are done by independent entities and we take their result very seriously.”