There are many questions being asked about the sebi vs. irda battle. If the fees paid to sebi / irda depends on the assets size, then it is obvious that both of them want a part of the wealth management pie. To most observers it was clear even in 2003-4 that by 2010-11 the assets under management of the life insurance industry would be greater than that of the mutual funds, now it has happened. Even if youleave the corpus of LIC the assets under management (more particularly equities) is far higher for life insurance companies. One major issue of course the amount of commission that an agent gets for selling a life insurance product is far higher than that of a mutual fund agent – at least initially. Now this is a product design fault – not the salesman’s mistake but the Managing Director’s office!
So it could be a battle for AUM. Remember there is another player in the pace – PFRDA. Next will be their move saying ‘Life Insurance companies cannot sell pension plans unless they are registered with us. So here you go again.
If a life insurance company were to sell a pension plan (with a life cover) it will have to register this product with IRDA (risk cover), with SEBI (the wealth accumulation process), with PFRDA (all pension products will have to be registered with them) and with RBI – ultimately it is the bank which will sell the product. Amusing, because all the 4 registrations will not protect the investor.
This reminds me of a dialogue by Amjad Khan in the film Sholay. …
“Ramgad ke vaasiyon ko…Gabbar se koi bacha sakta hain …to woh hai khud Gabbar”. (translated it means if somebody can save the people of Ramgad (one village that he has been tormenting) from Gabbar….then it is himself Gabbar.
One more quote from one of the Pogo programs…one of the characters comes running..and says “We have found out who is the enemy…it is us”.
So if the common man is waiting for IRDA, SEBI, NISM, RBI, …to protect him, he is mistaken. Only he himself can protect himself. Look at these institutions they still talk about ‘Investor Education’ – a typical high handed ‘babudom’ language. Is it not time we changed it to ‘Investor Learning and Development?’. Deven Shah are you listening?
Post Footer automatically generated by Add Post Footer Plugin for wordpress.