Education Or Advertising? —A checklist for picking an unbiased financial wellness program

  • Harvard Business School conducted a study of the Indian insurance market and concluded that insurance products are, and have been extensively mis-sold. You’ll find that study here. And there are some news snapshots here.
  • In 2018–19 alone, mutual fund middlemen(distributors/ financial advisors/financial planners) made about 8500 Crores in commissions. More about that here.
  • In an unprecedented move, in 2018, SEBI went to extent of warning mutual fund companies about excessive commissions being paid to distributors.
  • The largest receivers of mutual fund commissions for the past two years have been banks — institutes which many first time investors tend to trust blindly.

But here’s where the lure of commissions gets far worse

  • Sell/distribute loan, or insurance products.
  • Distribute/advise on mutual funds — via a free-to-use portal, or offline.
  • Provide free or fee-based financial advisory

Here’s a 4-point checklist to ensure you onboard an unbiased financial wellness program

  1. The program should teach its participants about the impact of commissions on wealth.
  2. The program should teach about zero-commission, or low overhead products — direct mutual funds, term life insurance policies, index funds to name a few.
  3. It should educate its participants about competing platforms — whether privately run or by an independent consortium.
  4. The program and its providers should not be affiliated to any private financial organisations.



Author of ‘Smart Money Moves’ & Founder of ‘The Moneyplanting Program on Employee Financial Wellness’ |

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