If you are a shareholder who started an asset management company and /or a life insurance company hoping to make money, God bless you! For those of us who are shareholders with the Birla, Hdfc, Tata groups – remember we are all funding the insurance and mutual fund businesses indirectly.

Kotak bank, Hdfc ltd, SBI, are all very profitable businesses (banking is the most profitable business in the world -ask Goldman Sachs, J P Morgan, Citibank or all the psu banks). However the mutual fund and the life insurance businesses are not making sensible money in India – and do not show any chances of making money for the next FEW years. It is easy for people who have not much at stake to say that ‘these changes were necessary and it is for the good of the customer’ but the shareholder will bleed. The bank promoted life insurance companies have it very nice – here is a good retail product whose commissions can be used to subsidise new branch openings. That itself makes Hdfc bank and Kotak bank good shares to buy. One will have to see how Yes bank and Axis bank play out the life insurance business piece. Of course older banks like Hdfc have the ‘trail commission’ which can be used to grow the mutual fund business, but newer banks do not have that luxury.

SEBI has not been able to do anything to regulate the PMS business, the brokerage industry, or the media covering the financial services industry. It is difficult to believe that there are 20 personal finance magazines, websites, etc. depending on the advertising by the financial media. It is difficult to know how all the magazines will make money.

Experts in the life insurance business  forsee a 30% cut in the total salary bill, a dramatic cut in the number of branches (rent gone), travel will be cut down (Jet Airways will make more losses), lesser recruitment (MBA schools will wonder how to cover fixed costs), lesser hiring (students and banks will wonder how the money will come back), and some Mergers and Acquisitions.

And now I R D A wants to regulate agents…OMG…it is scary.

Currently the best place to be now in the financial services industry is in the media. Salaries are good (did I hear Madhu Soman say very good, not sure), there are some regulatory changes every 32 hours (either by SEBI, IRDA, Supreme Court, RBI …or the fin min!!). Talk to a few people in the industry and do a story. However it is not worth being a contributor of stories. The Job is better for the butterfly :).


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  1. 20 personal finance magazines ? I coudl not go beyond 4. And I did not count the ones that cover just the stock market. Worth an article titled “The Best Personal Finance Mgs of India” ??

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