This is old, but brilliant. John Oliver on Investments, Retirements and All Things So Funny.
Some of this stuff needs to change for India. You don’t have retirement funds in India other than the NPS or the EPF/PPF combinations and it’s bloody complex. Setting up and using an NPS account is complicated and takes time to get going. But all NPS fund management is active (they don’t passively follow an index) and most of their equity portions have fallen short, in returns, of pure index funds! And these are the lowest cost products in the market. So it tells you one thing – lowest cost doesn’t mean anything, because people can *say* they are lower cost, but that doesn’t mean their returns will be higher.
Second, in India, there is no across-the-board fiduciary responsibility. You can’t take your banker to court for misselling you a product, yet. In the US, they’ve made a law that by 2017, advisors will have to be responsible for misselling. In India, banks have been fighting being labelled “brokers” which would give them some fiduciary responsibility (as in they have to look out for your best interest, not theirs). And for others, there is very little and slow enforcement through the legal channels, so you can be rest assured that people will try to scam you.
Finally, retirement annuities are horrible. We’ll speak of that too but most of these products give horribly low returns compared to even a government bond!
Much about finance in India is just screwed up. More on this coming up in a lengthy series. But John Oliver, he carries that information so much better!