I keep encountering this question very often. Some of the investors complain that financial planning is meant only for the rich and others cannot afford the charges. It may be true that for a set of people, it does not make much sense if the charges form a substantial percentage of investible surpluses. Was not this the complaint against Tier 2 account of New Pension Scheme? Was not this the reason for the Govt of India to step in and give subsidy on the new accounts that are being opened now? Alas, a financial planner has no such options. If he has to survive, he has to receive remuneration from his clients.
This discussion leads to an interesting scenario. Would a person be happy to have a financial planner who is not on a sound financial footing himself? Or to put it more bluntly, would a moneyed person appoint a financial planner who is financially wrteched?
Irrespective of the outcome of the tussle going on between SEBI & IRDA, ULIP has become the victim of the controversy. It elicits extreme views from the professionals; either they love it or love to hate it. People who are in the need of insurance are a confused and confounded lot. There are extreme views in the popular media that the advisors who are trying to sell an ULIP plan are trying to take the prospect for a ride.
It is high time the insurance industry ponders over the issue. If a product generates such a passionate and extreme view amongst the people, it will remain controversial and that situation is not good for the industry in the long run.