There are many problems facing the mutual fund industry…in an interview with Dhirendra Kumar of Valueresearchonline.com Mr. Sinor of Amfi says “the biggest problem facing the mutual fund industry is the mis-selling by the distributor”. This is a little amusing.
The insurance regulator and Sebi regularly make noises about mis-selling, however Amfi and the Life Council do not DO anything about the people who facilitate mis-selling. In a country with 9000 listed companies, all mutual fund schemes put together invest in 200 companies, how many mutual fund schemes do we need? Not sure, but there are not less than 200 equity schemes! 43 mutual funds * 5 schemes at least = about 200 schemes! Then there are balanced schemes. Equity schemes are large cap, small cap, mid-cap, top 200, top 100, top 150, K-10, K 30, …..with so much confusion and an untrained distributor, Mr. Sinor you really thought that every scheme SHOULD sell? So marketing managers encouraged churn – the distributor goes where the money is. If index funds, term insurance, good advice were encouraged by the industry (high commission dude) agents would have sold that!
Right now the MOST MIS-SOLD product is financial planning. Unless there is some independent organization supervising financial planning (they are not under the purview of sebi unless they are selling mutual funds). Also there are media houses who are now in financial products distribution. What a joke!
Amfi is a manufactuer’s lobby (like the Life Council) and actually has no business talking about distributors. However since distributors do not have a body for themselves, they are allowing Amfi to speak on behalf of the distibutors….what are Ifa galaxy doing?
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