The eminent panelists at Morningstar Investment Conference discussed the reason for low popularity of retirement planning.
The panel comprising Monika Halan - Mint, Sundeep Sikka – Reliance MF, Hemant Rustagi – Wiseinvest Advisors and Prasun Gajri – HDFC Standard Life Insurance felt that Indian investors still do not understand the importance of retirement planning. “Real-estate, gold and children are priorities for Indian investors. Retirement planning is still not their priority,” said Monika Halan, Editor, Mint Money.
With the knowledge level and the popularity being so low in India, there is a big opportunity for financial advisors to explore this market. Panelist recommended that the thought process for early planning of retirement has to be drilled in the investor.
Another hurdle in retirement planning is the variety of pension product available in the market. Monika, highlighted the fact that every product has different features and is regulated by different regulators. This creates a lot of confusion for retail investors and they are unable to decide which would be the best product to invest for retirement. Moreover, few retirement funds- NPS, EPFO, pension funds do not even illustrate their investment strategy, so the investors are clueless about their investment details.
Sundeep Sikka stressed on the need to conduct investor awareness program to make the people realise the need for retirement planning. He told the gathering that even top level professionals do not realize the need for planning their retirement. This attitude of investors can only be changed through investor education program.
Hemant Rustagi said that goal based investment planning or proper asset allocation is the best way to go ahead with retirement planning. He suggested that investors can also look at NPS but rest of the panelists did not agree with him as the product did not specify its investment strategy.
All the panelists agreed on one conclusion that financial literacy level has to increase to understand the importance of retirement planning and proper asset allocation is the best way to plan for retirement rather than blindly investing in ‘retirement’ funds.
