Confused investors are a sign of a developing economy

livemint.com:

Could Sebi’s curbs for investment advisers choke financial planning in India? A developed nation is one where land, labour, capital, entrepreneurship and technology are liberated from the mindset of an under-developed, frontier, or developing economy. India has a golden chance to achieve this, but Sebi’s role in market development, capital development and investor protection will be crucial. Developed countries are easier to do business in, and have lower fees for financial services.

Their laws ensure that investors can choose their financial intermediary and aren’t lumped with several ones, which ultimately reduces costs. In India, too, Gen X, Gen Y and Gen Z will be able to accumulate, preserve, inherit and distribute their wealth effectively only if they are provided comprehensive financial planning and advice within the regulated investment advisory space, and any overlap or regulatory arbitrage from incidental advice by any other market participant is removed. In other words, regulations must be designed to provide investors with single-door access to these services, with the required disclaimers and disclosures of course.

Also read: Should PMS investors switch to focused funds after new tax changes? A confused investor is a sign of a developing economy. As we move towards a developed India, empowering investors through education, disclosures and disclaimers, and clear boundaries will be essential. This means we need more registered investment advisors to protect investors.