Advisors urge the need for a stronger advisory system to sell life-cycle products.
Recently, SEBI’s International Advisory Board (IAB) had suggested the introduction of more life-cycle products alongside plain, vanilla products. As SEBI set the ball rolling, industry experts expect the innovative life-cycle products to bring in active retail participation.
“They (life-cycle products) serve as tailor-made products which retail customers can use for asset allocation,” reveals Srinivasan Jain, CMO, SBI Mutual Fund.
Asset allocation is a key step towards investment and life-style products will make life easy for new investors. “Such products are positive for the industry, though they might take a while to penetrate the market. Mutual funds are always linked to future goals hence these products will help retail customers do asset allocation with ease,” says Ajit Menon, EVP - Head of Sales & Marketing, DSP BlackRock.
A top official from UTI Mutual Fund feels, “While asset allocation will be easy for retail clients with lifecycle products, they will shift the advisor's responsibility to the fund manager.”
On the other hand, IFAs feel that a stronger advisory system is needed for launching such products in India. “Lifecycle products have done well in international markets. But for these products to work in India, we need stronger advisory processes and bettter analysis as these are long term products,” said Sumeet Vaid, founder of Freedom Financial Planners.
“These products will make product selection easy and help distributors to sell target oriented products. But to sell such products an advisors needs to know the product in detail,” said Pankaj Mathpal, MD Optima Money Managers.
