It is amazing to see so much of writing on the BFSI space. Sadly not enough sales people write, nor do end consumers.

The only people who write are people who also write copy for the same set of people. Or people who sit in ivory towers.

Let us see some of these thoughts:

1. “If bankers become brokers instead of being agents, they will sell INSURANCE products which are appropriate for the customer”: Complete humbug. If this were true, there should be no mis-selling at all in the mutual fund space, right?

Life is not so simple. With complicated products and indifferent customers (who do not care being lynched) such an ‘ideal’ situation will NOT emerge.

2. “P Chidambaram says Life Insurance products should be made more simple”. Really Mr. PC? who will then buy your 9% bonds with 30 years maturity and zero liquidity? You need LIC to pick up those and the PSU equity that you are unable to off load in the market. Remember UTI is no longer the biggest institution?

3. P Chidambaram will reduce stake in Axis bank, L& T and ITC. No, he will not. The current satraps ruling those companies do not want it done. It will not happen.

4. “ULIP is the worst product from the life insurance industry”. Almost all writers have said this. There is no better statement than this for salesmen who sell classic endowment and money back plans. Thank you all you intellectual writers, from all the life insurance salesmen in the country.

5. ‘All commission should be only trail commission‘. Brilliant strategy, it will work if all products have a 30 year lock in. Not if the client moves from fund to fund every 2 years. See the average holding period in the hands of an end customer and then come up with such suggestions please.

6. The regulator is here to protect the small investor. Yawn. He is here to protect the biggest player. Any doubts? check the facts.

 

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  1. I think point 5 is wrong. Brokers are churning portfolio to earn a front commission. I guess this has happened with a singer celebrity which has sued the broker bank. http://www.moneylife.in/article/hsbc-bank-loots-a-celebrity-after-big-promises-of-24-returns/24975.html

    As soon as it is stopped you will see increase in average holding period. Most probably you will see that it is diverted to FMP, closed ended fund or ELSS 🙂 Those are also devils but a lot lesser devils.

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