Rampant Misinformation

After explaining to my uncle about how regular funds charge additional expense ratio, he went to his relationship manager to redeem. The RM explained there are “no fees” and sent him back with a smile that he wasnt paying anything extra. The MF companies will never want to educate investors about direct funds. Ideally SEBI investor protection fund should fund such initiatives. Even well educated people get misguided and the more vulnerable are really at the mercy of money grabbing distributors.

Wonder what is the right way to educate people that they are paying for service which they dont get. The moment someone like ZD tries to make the cost explicit, there are 10s of questions asked. Aparently ignorance is bliss holds much better in this world.


Mutual Funds have seen growth over the years only because of the distributor system who brought in clients and also recommended what to buy, same was the case with the broking industry where people only traded in what the broker recommended.
But if you see the Discount Broking model which Zerodha started in India in 2010, they have been successful in changing the broking business and with initiatives such as Varsity, also have been able to educate clients to trade themselves without relying on tips(which may or may not have backing).
With Coin, the initiative to move clients to more profitable investments has just began and people like your uncle will learn eventually when more people like you tell him what you just did. Coin was only introduced March 2017 and has a long way to go.
However, I’m not very optimistic of the SEBI Investor Protection bit :smiley:


The psychology of the End user does matter when you introduce a new concept to them.

People get used to certain ways for a long time and are reluctant to make changes even it means saving money or time.

Also, when it comes to Indian psychology, a typical Indian would rather sacrifice 28 lacs INDIRECTLY over 25 years, than pay 900 Rupees DIRECTLY out of pocket per year.

The Innovative Financial products we see recently in the market are best suited for the very Young working generation, who are willing to accept changes and make educated lifestyle decisions.

Assuming you UNCLE, does not fit the above profile, it is better to leave him alone and let him live happily in his good old ways.


Probably, but he is my family and dont want him to waste money given its his retirement corpus. All kinds of people have an eye on that money. Endownment plans, estate plans, private equity etc you name it. Anyways - literacy is a journey, including financial literacy.

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