Free advice for those in the advisory business

When you get a third call in a week from someone wanting to discuss their business plan in the same area of work, you know that this is an industry just waiting to take off. Advisory in financial services in the online space is buzzing with new start-ups and business plans. The first wave of business ideas came some five years ago with comparison and execution platforms across the home loan, insurance and mutual fund industries. As it happens in start-ups, many of the ideas went under. But there are businesses in each of these verticals that have survived and look viable. Most of the ideas that centred on pure-play financial literacy died a natural death. People don’t log on to learn about finances just as we don’t go on to the Internet to learn to medicate ourselves and self-prescribe drugs for persistent problems.

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When you want to jump on to an aircraft that’s taking off

There is something about markets on a tear that gets people’s blood buzzing. My usually quiet desk on Monday was the place to stop by and ask: so good time to invest? Waiting for the lift. In the lift. On the phone. On SMS. Good time to invest? Huh? What just happened? Monday saw Nifty breaching 7,000! And Tuesday saw it staying above that level despite bad news on the industrial production and inflation fronts. But nothing seems to deter investors who want to now suddenly swing big. Wanting to invest right away when a market hits a life-time high is like trying to jump on to an aircraft just when it is taking off or, worse, trying to leap on, like James Bond, mid-way through the flight. If investors were airline passengers, they’d find the check-in, security, boarding process too tedious and boring to go through. If they managed to do it and the flight got delayed, they’d rather go back and travel another day. They behave as if this flight will never take off. But when the plane starts to taxi and take off—gosh the mad scramble! It’s as if the average salaried people had crores that they would shovel into the market maw and see it spit out double the amount in a trice.

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When you have Rs.20 trillion of cheap money, why reform?

As the country prepares to love or hate the next government, some of us finance nerds are keeping our fingers tightly crossed that the next finance minister understands finance. At stake is the implementation of the Indian Financial Code—a set of laws that puts the Indian consumer of financial products and services at the heart of the financial system. India is possibly the first country in the world to attempt to codify consumer protection in finance into law. Loaded against this changeover are two giant forces. The first are the powerful lobbies of banks, insurance companies and other finance firms who benefit if fuzzy regulation, regulatory arbitrage and cosmetic attention to consumer issues continue. The second is the government itself. There is a conflict of interest for the government to change from a system that ensures cheap money to one that will make the government less dependent on money from financial repression.

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