Websense says organisations in India under pressure to protect data

According to a Websense survey, reputation risk and potential loss of customers emerged as two major concerns amongst IT decision-makers if a data breach was to occur

Security services provider Websense Inc said that nearly all respondents (about 98%) from its data security survey conducted in India have said that they are under pressure to ensure protection against data loss.

"The survey findings clearly suggest that data security is among the top issues for information technology (IT) management and confidentiality of data is critical despite tough economic conditions and increased compliance issues," said Surendra Singh, regional director, SAARC and India, Websense.

The survey was conducted amongst 50 chief information officers, chief risk officers and IT managers at the ‘e-Crime India Congress’ at Mumbai, to gauge the impact of data loss on organisations, its causes and readiness of organisations to stop security breaches.

According to the survey, reputation risk and potential loss of customers emerged as two major concerns amongst IT decision-makers if a data breach was to occur. Around 89% of respondents said that it may lead to loss of customers while 82% said that it will result in loss of reputation while 31% of the respondents said that it may have negative impact on the share price of the company.

Responding to accidental data leakage, 63% of respondents believed that most data breaches happen as a result of unintentional or accidental data leaks while 48% of respondents felt that companies are not prioritising security due to cost-cutting measures. About 68% of respondents said that data breaches happen when employees take confidential data with them when leaving the company.

The survey said around 89% of respondents were of the view that the amendments made to the Information Technology Act 2000 (the IT Act) were a step in the right direction for tackling data security issues.

"With the changes in the IT Act to protect confidential data and the necessity to reduce the risk of losing customers or damaging corporate reputation, organisations should look to step up their plans in building safeguards against possible data breaches," said Mr Singh.

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Are mutual fund investors ready to pay a fee to distributors?

After SEBI cracking down on entry loads and upfront commissions, IFAs are thinking of charging MF investors a fee; however, a few market watchers feel that investors are not ready to shell out money yet

Mutual fund (MF) distributors across India are finding new ways to remain in the business. They are now thinking of charging their clients for investing in MFs.
“I have kept my clients informed about what is happening in the industry. The 0.50% commission paid by the asset management company (AMC) will not continue for a long time. AMCs are bleeding. I charge 2% from my clients. We are able to charge only our existing customers who know our quality of services. It’s difficult to charge a new customer,” said Thiru Murugan, CEO, Wealth Creation & Management Services.

“I know a typical case where a person who went to deposit Rs10 lakh was sold ten different ULIPs (unit-linked insurance plans) for the entire family. Next year he received a notice that he has to pay Rs10 lakh as renewal. The Securities and Exchange Board of India (SEBI) says that it is protecting investors, but I don’t know who will regulate banks,” adds Mr Murugan.

But there are others who feel that if the fund does not perform well, then investors will rush to their office to demand a return of the fee.

“Customers only pay to banks and big institutions. Clients invest Rs5,000 initially after taking advice and then invest Rs1 lakh directly. If an MF doesn’t gives good returns then clients will come and ask me to pay back the fees,” said a certified financial planner (CFA).

A distributor gets Rs6 as commission for a client investing Rs500 per month in a systematic investment plan (SIP) for one year (a total investment of Rs6,000). Distributors are finding it unviable to continue providing service to such clients. There are talks among the IFA community of charging a uniform rate. IFAs are planning to come up with a rate card enumerating various charges.

However, this uniform fee model would not be relevant across India for all distributors. The charges are likely to differ from one distributor to another depending on the advisory. As of now, distributors are thinking of charging anywhere from 1% to 2% of the total investment from their clients. SEBI had earlier mandated that the upfront commission to distributors shall be paid by the investor to the distributor directly.

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COMMENTS

Manoj

7 years ago

I wonder how many of the worthy people who are commenting here on the agent's commission would work at reduced salary levels & foregoing bonus???

Any answers?

NIRMAL BHAUWALA

7 years ago

every thing is chargable.nothing is free.why &how customer think free advise.we must charge from customer

pandharinath prabhu

7 years ago

There is no doubt that Moves from SEBI will lead to close down the Industry. In india nothing can work without middleman. however the saving grace is now onwards only the distributors who have knowledge of Mutual fund business and Service angle will remain in business . All other part timers will be thrown out ( they are already out ). Nothing to worry about banks and national distributors , they will never be able to replace IFAs. Its a common experiance that investor who visit Bank once never goes there again. Inshort now onwards IFA will have to put his foot down and demand payment for the service he offers. belive me no investor will be able to do direct investments. Its not so simple

Suresh Ramasubramanian

7 years ago

If the distributors that are excessively focused on commissions are driven out of the market that's probably a very good thing.

Suresh Gupta

7 years ago

I fail to understand what happened to Sebi's Investor protection Move. Why they do not understand that people will sell something else.

Regards.

MK

7 years ago

It is easier said than done. Every IFA would like to charge his client but in doing so he fears that the client will not be interested in doing further business with him. A final stand on charging clients can be taken by IFA's only after knowing whether Sebi has finished its agenda of cleaning the mutual fund industry. Then we will know whether we will still survive in this industry or not.

ROOPSINGH SOLANKI

7 years ago

I WOULD FURTHER ADD THAT PRIOR METHOD OF COMMISSION FROM AMC IS THE ONLY WORKING METHOD BECAUSE FROM THAT COMMISSION CLIENTS WERE ASKING FOR PASS BACK-AND THIS PASSBACK SHOULD BE MADE LEGAL-PASSBACK IS NOT A CRIME-IF A CLIENT MAKES A BIG INVESTMENT-HE HAS ALLL RIGHTS TO NEGOTIATE-WHICH IS EVIDENT IN ANY BUSINESS STRUCTURE-WHOLE SALE PRICES ARE ALWAYS LESS THEN SMALL PURCHASES-BUT FOOOLISH PEOPLE SITTING IN SEBI WONT BE ABLE TO ACCEPT THESE THINGS-BECAUSE THEY WANT TO SHOW THAT SEBI IS COMMITED TO CREAT ''RAM RAJYA'' FOR INVESTOR COMMUNITY-

ROOPSINGH SOLANKI

7 years ago

DEAR READERS,
I HAVE RAISED THIS MATTER IN SO MANY AMC GATHERINGS-REINSTATING THAT IFA'S ARE NOT FUND MAMAGERS WHO SHOULD BE BLAMED FOR ILL PERFORMANCE OF ANY FUND-IF SEBI IS REALLY CONCERNED ABOUT INVESTORS PROTECTION-IT SHOULD MAKE A LAW THAT AMC'S CAN CHARGE A FEES FROM FUND ONLY IF THE FUND MAKES A PROFIT-WHY THIS 'QUALITY OF SERVICE 'CLAUSE IS TAGGED TO ONLY IFA COMMUNITY WHICH ARE MERE ADVISORS-NOT MANAGERS OF PEOPLES MONEY-IT IS REALLY A TRUE FACT THAT CLIENTS GIVING FEES WILL ASK FOR REFUND IF FUND DOES NOT GIVE EXPECTED RETURN-BUT IFA IS NOT CULPRIT OF THIS-IT IS MARKET AND FUND MANAGERS WHO MOST OF TIMES PLAY DIRTY GAMES WITH PEOPLES MONEY TO BUY OR SELL STOCKS WHICH ARE FUNDAMENTALLY WEAK-SO IT IS A FACT THAT IFA WILL WORK AS MERE POSTMAN AND LITTLE BIT OF ADVISORY-THEY CANT TAKE PRIDE FOR FUND GAINS OR CANNOT BE BLAMED FOR FUNDS UNDER-PERFORMANCE-SEBI SHOULD NOT STICK TO SINGLE AGENDA OF BLAMING IFAs BUT IT SHOULD TIGHT ITS KNOT ON AMC'S IF IT REALLY WANTS INVESTOR PROTECTION-BUT THE REALITY IS THAT''KAMJOR AADMI PER HAR KOI JOR AJMATA HAI AUR TAKATWAR SE HAR KOI DOOR REHTA HAI-JUST LIKE SEBI CANT TAKE A BULL FIGHT WITH IRDA OR AMC'S-SO IT IS JUST PULLING EARS OF 'KAMJOR IFA COMMUNITY'

R.Balakrishnan

7 years ago

The only way out is to charge the individual customer. If he does not pay, let him get fooled in to buying a ULIP. If we can pay a doctor for a prescription without actually negotiating a charge, why the hell should an investor not pay a fee for advice. In case anyone asks for free advice, the best thing is to tell them to pay or go take a hike. Time the 'small' investor learnt his place in the universe.
IFA/Agents should not service investors unless there is a fee. Make it clear, upfront.
It is time that some distributor challenged SEBI in court about its right to dictate terms to the distributor. SEBI cannot take away someone's living.

Fifth quarter straight rally—but what lies ahead?

Stock markets have rallied for the past five consecutive quarters. How will the markets perform in the coming quarter? Moneylife’s study of similar historical patterns points to a 100% negative trend

The thirty-share BSE Sensex has been on a roll for the past five quarters. Although the Sensex ended the March quarter only marginally higher than the December closing, it now means that the Sensex has been surging for the past five straight quarters. Will this momentum continue or will the markets take a breather?

Moneylife did a study of the past performance of the Sensex when the index had reported similar growth for a span of five straight quarters. We found to our surprise that the outcome for the subsequent quarter—after the rally in the previous five quarters—was the same throughout.

We looked at Sensex data from 29 January 1979 up to the last week. We found that during this period, there have only been five instances of a sustained rally in the Sensex for five straight quarters. What happened in the 6th quarter in these cases? In all instances, the subsequent quarter has reported a substantial decline in the index level. That is an astounding 100% negative outcome. On an average, the Sensex has dropped by 13% on such occasions (not including the current quarter).

So does this mean that the Sensex will be unable to sustain its solid show in the coming quarter?

Regular readers of Moneylife would be aware of a similar study of the past performance of the Sensex when the index had witnessed a rally for weeks on end. The study accurately predicted the continuation of the index rally in its sixth and seventh week.

We also pointed out, based on this data, that the chances for an encore in the eighth week did not appear so robust. We had advised readers to exercise caution as chances of a reversal were getting stronger and that the markets may take a breather after this prolonged rally.

Surely enough, the eighth week saw the index snapping its seven-week rally, with a drop of 0.5% over the previous week. This definitely lends some support to the contention that the Sensex is likely to end up closing lower in this quarter compared to the March quarter.

User

COMMENTS

M.R.Borkar

7 years ago

Good outcome of the study. My experience is, just over 40 years, is market surprises. 2 crucial factors are weighing heavily, for n against, market rise, brewing another financial crises in advanced economies n monsoon performance. So caucious optimism is what I am holding. U can still go long selectively. To-day 8.4.10, ad/decline is is just over 1. This is quite normal, but shud not be more than 8% for the next 4 sessions.

RUJUL

7 years ago

GREAT ..I HAVE SOLD ALL MY HOLDING EITHER IN PROFIT OR IN LOSS ...THE SPECULATIVE GROWTH RATIO IS GONE UP & FUNDAMENTAL GROWTH RATIO HAS GONE DOWN

Narendra Doshi

7 years ago

GREAT INFO. Am anxiously waiting for THIS outcome come true at the end of THIS quarter - Apr-June 2010.
Good Luck.

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