I personally have little at stake in the mutual fund business, but surely the current mess is likely to stay much longer. 2 products which are similar in nature having a different kind of sales incentive is a big danger to one being crowded out. Of course other than the regulator everybody knows it.
Khyati of DNA had given an example from Sheena Iyengar’s book – if the same company owned a famous water brand and a famous soft drink brand, it is fairly obvious that their marketing muscle will be behind the soft drink brand assuming it is more profitable.
I do not agree with this example in the mutual fund vs. life insurance case because there are millions of people who cannot be insured. However all of them could be potential mutual fund holders. Also if Mr. Deepak Parekh has sustained losses in the mutual fund industry for so long, he is not just interested in ‘surviving’ – he needs growth. And the life insurance business is also going through hell. There is a painful and quite poorly handled downsizing in the whole industry.
The fact that our regulator has made a mess is a given! And the great people have got international recognition….and here the maharatis are being quoted..have fun..’
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