When you buy a mutual fund through your bank, is the bank advising you or acting as a vendor? The answer to this question is important because the product you finally walk out with will either be a product that best suits your needs or a product that maximises the bank’s own interest. According to data compiled by Outlook Asia Capital Wealth Management India, which put together commission data from the Association of Mutual Funds in India (Amfi) (http://bit.ly/2a1hFAL ) and individual fund house commission numbers from their websites, banks are acting as advisers while wearing the hat of vendors. If you did not pay a fee for the advice in the bank and then walked to another desk to buy the product, the bank has mixed up the two roles. Anecdotal evidence shows that customers are influenced by what the bank manager has to say on product choice. It is unusual for a person to go to a bank asking for the product by name. It is usually a push from the bank that sees the fund build up in the account and then makes a sales pitch.
