"We trust that you will avoid using harsh language and will refrain from making unsubstantiated allegations against individuals and firms. Your constructive feedback and opinions are very valuable to all of us in the industry. "
Mr. Dinesh, with all due respect, just take a ride with a small town distributor and sell the simplest product.
Dear Mr Khara 1) I dont think pharma products & financial products distribution comparison is apple to apple simply because no two clients financial objectives are the same whereas doctors prescribe the same medication 2) How do the suggested changes increase MF penetration in our country? 3) Why are we blindly aping the west? Is Indias MF literacy as high as the US? 4) What has been the experience of even far more developed countries like Canada? 5) Ours is a 2.5% cost industry, and when everything is within this limit, why highlight only what distributors are earning?
I don’t agree that MFs can be segregated into OTC and prescription products. The key to mutual fund investing isn’t just buying, its more of staying put through volatility (even the basic liquid fund aren’t immune), periodical review & rebalancing and timely exit. Also, mutual fund means simple products, this is what the all industry participants/regulator wants and the products are getting simpler over time, so where is the scope for complex products in this industry. To increase the reach to unexplored, uncharted territories, one needs to know the ground reality, I suppose you/your team/the regulator spending a day every month in a distributors office would be of great help.
Mr. Khara is to be complimented for bringing some fresh views onto a topic that is already a much-flogged horse. However , the difference between pharma and financial products will make prescription the norm so that even commodities become specialised commoditties requiring approval. All human bodies are within a narrow range of weights and all are invariably at the same normal temperature.Even in weight, there is a difference between adults and children, with consequential changes in pharma dosage. However, "financial Body weights" vary enormously , as we all rue, and an advisor must first decide on asset allocation . Allocation to equity will vary as will debt , depending on the total wealth. Even Bank TDR is not really a pure commodity, since there is the risk of cxonservatism, which can disable even the smallman in the context of inflation. I hope AMC heads like Sri Khara could see their way to supprting search for universalisation of Advice.