Hi,
Ask any Financial Advisor, 100 times out of 100, he would say Insurance is not an investment and would ask you to rather invest in Mutual Funds.
Insurance charge you heavily, leave you very little room to get out of their scheme, always give you lesser return than Mutual Funds.
Mutual Funds, on the other hand, expenses have a ceiling of 2.5 percent. They are very Transperent in their dealing, holdings, allow easy exit and give BETTER return than Insurance.
But, still Mutual Funds are lagging far far behind than Insurance counterparts in terms of Assets Under Management. Why is this so?
SEBI, has not been of much help either. While SEBI has made PAN compulsory for Mutual Funds, it has left Insurance including ULIP untouched whereas Both have similar range of investment mandate and target similar set of investors.
Read more about this in accurateadvisors dot blogspot com and goodfundadvisor dot blogspot com
More awareness is needed for higher penetration by Mutual Funds. While Insurance Industry, who launch similar range of products (ULIP, etc) with similar structure, for the same set of investors have celebrities like Sachin endorsing their products, Mutual Funds are barred by SEBI from getting celebrites to Advertise their Schemes.
Why this discrimination? SEBI should look into the matter urgently and after serious introspection, implement changes creating a Level Field for both Insurance and Mutual Funds.
Finally, do you know......... Only 3% of Indian Household savings are invested in Mutual funds whereas 90% of Australian Savings go into Mutual Funds!!!!
Think over it.....
Regards,
Srikanth
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