Baroda BNP Paribas has launched its Retirement Fund with an aggressive hybrid asset allocation and a flexicap fund strategy.
Suresh strongly believes the 5 year lock in (or age 58) is a very effective discipline builder – which is key to actually creating wealth in investor portfolios. The “retirement” nomenclature is a very effective mental accounting tool to get investors to treat this as a separately identifiable pool of money for a critical goal – which again is vital for delivering successful retirement planning outcomes. He urges distributors to help investors understand the power of both these features of MF retirement funds, when considering avenues for retirement planning.
Compared to insurance products for retirement planning, MFs are low cost, transparent and come with zero penalty charges – unlike their insurance counterparts where investors get pathetically low surrender values if they chose to exit early.
The need for greater awareness building around retirement planning is driven home by very sobering findings of an Aug 23 survey conducted by Max Life Insurance across 28 Indian cities. 90% of investors over 50 regret not starting early with their retirement plans, a third of Indians believe they will run out of money within 5 years of retirement and over half of Indians are dependent either on their children or on inherited wealth to see them through retirement.
Baroda BNP Paribas MF is not seeing this as another product launch– it endeavours to contribute meaningfully to raising investor awareness of the need to start planning early for retirement and the benefit of choosing retirement funds from the MF industry as the vehicle of choice for this goal.