You can't escape the phrase 'gift your child Rs 1 crore' printed in bold letters in the newsletter from the neighbourhood mutual fund agent. Then, the small text below it explains that if you invest Rs 6,000 in best performing mutual funds scheme via a systematic investment plan (SIP), your newborn would be a crorepati (assuming the scheme returns 20% per year) by the time she becomes 18.
The example shouldn't surprise anyone, but actually it does. It is because the mutual fund newsletters usually don't talk this way: their tone is always impersonal; they always speak about the dividends declared, performance of top funds vs the respective benchmark, assets under management and so on.
''It is true that mutual fund newsletters usually speak about the performance of schemes, returns on benchmarks like sensex, dividend history, assets under management... Insurance players used to speak about goal-based investments,'' says Rajesh Krishnamoorthy, managing director, iFast Financial. ''It seems the mutual fund industry has also started speaking about investing for a goal. Maybe because of the recent troubles the industry is trying to reach out to investors forcefully,'' he adds.
''Maybe it is true that we were speaking more about performance, dividend and so on. But there was always a tacit understanding that mutual funds are the best investment vehicle to meet individual's long term goals,'' says Sandeep Dasgupta, CEO, Bharati Axa Investment Managers. ''The change in language may be because the industry is going through dramatic changes after the entry load ban last year. Maybe this is one way to communicate effectively to investors,'' he adds.
The mutual fund industry has been struggling to find its feet ever since the market regulator — Securities and Exchange Board of India (Sebi) — banned entry loan on mutual funds. Mutual fund sales force has been dwindling since then. Faced with no incentives to sell MF schemes, many agents have shifted to peddling more-lucrative unit-linked insurance plans (Ulips), which gave them attractive upfront commissions.
According to financial experts, mutual funds should do more investor education programmes — as per the new guidelines they are expected to hold five such programmes every month, but they seldom do it — and talk more about goal-based investments.
Source: http://timesofindia.indiatimes.com/business/india-business/MFs-go-insurers-way-to-sell-plans/articleshow/6588257.cms
The example shouldn't surprise anyone, but actually it does. It is because the mutual fund newsletters usually don't talk this way: their tone is always impersonal; they always speak about the dividends declared, performance of top funds vs the respective benchmark, assets under management and so on.
''It is true that mutual fund newsletters usually speak about the performance of schemes, returns on benchmarks like sensex, dividend history, assets under management... Insurance players used to speak about goal-based investments,'' says Rajesh Krishnamoorthy, managing director, iFast Financial. ''It seems the mutual fund industry has also started speaking about investing for a goal. Maybe because of the recent troubles the industry is trying to reach out to investors forcefully,'' he adds.
''Maybe it is true that we were speaking more about performance, dividend and so on. But there was always a tacit understanding that mutual funds are the best investment vehicle to meet individual's long term goals,'' says Sandeep Dasgupta, CEO, Bharati Axa Investment Managers. ''The change in language may be because the industry is going through dramatic changes after the entry load ban last year. Maybe this is one way to communicate effectively to investors,'' he adds.
The mutual fund industry has been struggling to find its feet ever since the market regulator — Securities and Exchange Board of India (Sebi) — banned entry loan on mutual funds. Mutual fund sales force has been dwindling since then. Faced with no incentives to sell MF schemes, many agents have shifted to peddling more-lucrative unit-linked insurance plans (Ulips), which gave them attractive upfront commissions.
According to financial experts, mutual funds should do more investor education programmes — as per the new guidelines they are expected to hold five such programmes every month, but they seldom do it — and talk more about goal-based investments.
Source: http://timesofindia.indiatimes.com/business/india-business/MFs-go-insurers-way-to-sell-plans/articleshow/6588257.cms
Posts
No comments:
Post a Comment