One thing the unit linked plan vs. mutual fund (I have no clue why there should be such a debate – owners, executives, salesmen, clients – I find are fungible between the 2 businesses!!) argument has done is created a consensus:
“Fee based advisory is the cure for all evil”. This brings us to the question – what is evil you all know who is now evil, do you not?!!
We have been going to a doctor (we choose a doctor whom we can afford) and paying him a ‘fee’ based on the time that he spends with us. Therefore there should be no worry about being sold a wrong solution. Correct? LOL.
For a fee based service to succeed (it is still not a success in any part of the world for the mass market) there have to be some pre-conditions. The fee based adviser is like a doctor, so he should wear a white coat – AND NOBODY else in the market should be allowed to wear a white coat. He should not be tied to any ‘house’ for any product. A doctor who is tied to a nursing home which has a chemist shop is a deadly combination.
Now if a fee based adviser decides that his wife will be an agent for all mutual fund and tie up with a broker for insurance….it would be a case of going to a quack who is operating from an authorized dispensary! During inspection you see the doctor, post inspection the doc goes away and the quack comes in.
Will this happen? Ask yourself whether it is already happening?
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