It is a pattern now. Whether it is at a committee meeting or a conference where retail financial products are being discussed, the example of the National Pension System (NPS) keeps coming up to substantiate the argument that lobbyists make in favour of front-end incentives in retail financial products. Their argument goes like this: you can have the best product but unless there is an upfront commission, it will remain on the shelf. Look at the NPS, it has the best product structure, but retail participation is not there; it has failed. I’m always amazed by this argument. Because this is not the failure of the NPS, but of the market place. The ‘fault’ of the NPS is this: it is a good product in a bad market. I made this argument at the Second Pension Conclave organised by the pension regulator last week in Delhi.
