Too much is being made about the investing sense of the common man. Just too much.
If all investors are rational, they would ALL buy term insurance and invest the balance. This has not happened in ANY part of the world. All over the world ULIPs are sold by various names and in various shapes and sizes.
If all investors are rational, India would have had 5-6 mutual funds, 30 schemes, and a huge index fund AUM. The truth is we have 43 mutual funds, 100 more wanting to enter, 10 of them profitable, and 3-4 of them criminally profitable.
If all investors are rational, people will have one bank account, one demat account, one credit card,…..in real life they have at least 5 bank accounts, 2 bank lockers, multiple demat accounts…..
If all human beings were rational, they would buy vegetables, clean it, and cook at home. Tch, tch sensitive topic, right?
So if a ‘direct’ option is available, what will happen? Well people will have an option to invest directly.
Will people use it?
Simply because people will be pushed to that by websites, magazines, pundits…..
Should people invest directly or through an agent?
Depends on whether the ‘agent’ adds value in the real sense. If he does not, just ignore him
What value does an agent add?
He uses past data to tell you that Icici Pru’s Naren is smarter than Prashant Jain -because his past one year record is better than Prashant’s.
My take is Hdfc, Templeton and Naren Sankaran are all good fund managers 🙂 The irony is intentional.
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