Why ULIP mis-selling has become rampant ?
Why is there so much mis-selling of ULIP? How to avoid this mis-selling? Who should take ULIP?
India’s mutual fund (MF) industry has evolved and grown multi-fold throughout the years. It has reached a position where its average assets under management (AAUM) is at ₹ 31.84 lakh crore. It is among the fastest-growing sectors and hence there would be tremendous opportunities for people aspiring to build their careers through the distribution of mutual fund products.
However, looking at India’s growing financial markets and population, industry veterans feel that there is a lot of potential for the MF industry to grow and expand its penetration among the common man.
Indian mutual fund industry has registered a six-fold increase in AUM over the last 10 years, even though it has a long way to emerge as the preferred investment choice for retail investors.
Highlighting the pace of growth in CII’s 15th annual summit on March 5, industry experts are of the opinion that the MF distribution section needs to be worked upon with regards to seeing fast forward growth thus bringing in more retails investors. As of now, the penetration is high with high-net-worth customers specifically from metros. There is a need to attract small-base salaried level customers to invest in mutual funds.
“Time has come for mutual funds to be an integral part of acquisition and portfolio management in managing a customer base and ensuring that financial institutions should have responsibilities towards clients to make them aware of mutual funds as a concept. Banks should take additional steps to make a customer base as they play a vital role,” said Sharad Mohan, Country Head—Retail Banking of Citibank India.
Also, Dhruv Mehta, Chairman of Foundation of Independent Financial Advisors (FIFA) suggested easing of some regulatory norms for AMCs for their growth and development.
Various MF utility platforms, independent financial advisors, and individual distributors should be promoted as they are the ones who have the capability to bring in the customers and can make the Indian mutual fund industry grow to reach Rs 100 lakh crore AUM size, experts said.