Planes, (Indian) Trains and Automobiles

Planes, (Indian) Trains and Automobiles




Whilst visiting Mumbai last week I took the time to look at advertising in general and financial services in particular to compare what I saw with what we are told of the ‘Indian investment story’ in the UK press.

Around Mumbai there were many street adverts for ‘luxury’ items such as perfume, chocolate, smart (if not designer) clothes and savings plans.
There were also the global city standards, such as McDonalds and there was a massive amount of mobile phone advertising. On individual poster sites and billboards as could be expected but also crammed onto every spare inch of bus stop, lampost and street vendor stalls the latest handsets and tariffs competed for attention and sales.

The financial services adverts mostly fell into one of three basics.

The first was a version of what we call unit trusts or OEICS and the Americans call mutual funds. Often referred to in India as unit plans these were focused on inward investment or infrastructure. Many funds shouted about their capacity to reinvigorate and/or build trains, bridges, roads and cities.
There is an advert above showing the T.I.G.E.R. fund from Blackrock (a familiar UK fund house, currently famed for a gold related fund). In the UK in the late 90s TIGER in investment terms was the Asian Tiger economies. In India 2010 it is The Infrastructure, Growth and Economic Reform fund. Described as “An open ended diversified equity Scheme, seeking to generate capital appreciation, from a portfolio that is substantially constituted of equity securities and equity related securities of corporates, which could benefit from structural changes brought about by continuing liberalization in economic policies by the Government and/or from continuing investments in infrastructure, both by the public and private sector.” It is typical of this type of available investment opportunity and often the wording in the advertising was in terms of ‘building YOUR India’.

On that note, the second type of financial services advert was for shares. Remember the ‘demutualisation’ and ‘privatisation’ frenzy of the 80s in the UK when building societies and insurance companies (Halifax, Norwich Union etc) became PLCs and national industry (British Airways, British Gas) became privatised? “If you see Sid, tell him”
It was similar to this with shares in companies that will build infrastructure being offered. There were also a number of sites with ‘Thank You’ adverts, congratulating the Indian Public for buying up all available stock in a certain company that would now build a bridge or dam.
Private equity ownership, either directly or through funds is definitely an aspirational ideal and with returns at a decent level as the economy grows (unlike the recent UK recessionary numbers we are seeing related to interest rates and equities)

The third and final main type of financial advert was educational and promoted saving, either through unit plans (see above), an ‘all in one plan’ the UK saver would recognise as an endowment. There were also pensions for old age. Even allowing for translation UK readers may well be charmed by the following given our more cynical minds with regard to financial services products and advertising:

For Savings: “…special plans are not plans but opportunities that knock on your door once in a lifetime. These plans are a perfect blend of insurance, investment and a lifetime of happiness”
Given the discredited nature of endowments in the UK I wonder what the FSA (Financial Services Authority) would make of a UK insurer advertising an endowment in that fashion here!

For a Pension: “Pension Plans are individual plans that gaze into your future and forsee financial stability during your old age. These policies are most suited for senior citizens and those planning a secure future so that you never give up on the best things in life.”
Again, interesting to note the focus on the individual taking their own responsibility as compared to a cultural feel in the UK of a traditional entitlement or right to state benefits. It was also fascinating to see that marketing executives in India are no more creative than their UK & US counterparts in that nearly all pension adverts show an unnaturally young looking senior couple laughing and pointing into the distance :-)

More seriously and pleasingly there were a number of adverts extolling the benefit and value in saving regularly and starting early. It seems this financial wisdom is truly global and timeless. This was super to see as one of the reasons I was invited to India and one of the subjects we discussed at the ‘best practices’ meeting I attended was how MDRT could promote the idea of its members extolling the virtues of ‘financial literacy’ in their own communities.

So I enjoyed my overview of a small slice of Indian Financial Services Advertising and it was a pleasure to see areas such as Life Insurance, which is often neglected here being promoted and purchased en mass (and remember as a nation the UK is generally woefully underinsured, a fact which I sadly see all too often when advising families that have lost a loved one).

But it will be interesting to see what happens in the future. Another of the reasons I was invited was because the UK has endured massive amounts of regulation in financial planning. Much of it needed, some of it overbearing. Developing (in the financial services sense of the word) nations want to learn from our mistakes and successes and MDRT and its global network of members wish to help.

And what about when things don’t work out like the adverts?
So far the Indian Financial Services story has been one of success, with the economy growing, more and more people saving and becoming wealthier and markets rising. I hope the Indian Financial Services profession will deal just as well with the falls in markets, the consolidation of companies and the introduction of regulation when it all surely comes as it has with the current growth and expansion.