The blurring lines between what is media and who is selling a product is really painful for the end user. Let us say I was running a website (and my income came from the number of people coming to my site, a.k.a. advertising) I have to say certain things.Imagine a website which says nasty things about ULIPs – because it sells mutual funds on its site. Of course people who know do not care (perhaps) or do not know. Most readers/ viewers may not know a pure information website (Myiris.com) from a pure transaction website (Indiainfoline.com) and those which are information and selling websites (moneycontrol.com and equitymaster.com)
Like one reader to this blog (Sukumaran had asked will L&T opportunities fund be recommended because unlike Chola this new fund house will have advertising budgets!).
If I were running a pure advisory business keeping in touch with 2-4 fund house schemes is more than enough. This can be done on the basis of organisational branding, performance, range of funds, etc.
There are IFAs, with corpus more than Rs. 30 crores who do business with 2-3 fund houses. However as part of the media there is a COMPULSION to keep in touch with 44 fund houses. All of them will have NFOs, so they will all advertise. This means when a portfolio is being created it is compulsory to say nice things about big advertising fund houses, emerging fund houses who are likely to spend more, theme funds where any logic can be used to justify performance, and create a portfolio with 12 schemes!
Also it is almost impossible to do an article saying “Worst performing fund schemes” or even worse ‘Lousy fund manager who is job trotting’.
Have you seen such an article? Please send me a link…except if it is from MoneyMantra – I have seen it 🙂
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