It is funny that to be in any business you need to have some qualification. Let us take the mutual fund business for example.

To be the Asset management company – you need to have 5 years of track record of some financial business. You need to have a networth of Rs. 10 crores (to be raised to Rs. 50 crores if SEBI has its way).

To be a fund distributor: 12th Standard + Nism exam + NISM’s rent

To be a R&T agent: qualification + exam + fees + competition to earn money

The only thing you can do without any qualification, any rules, any regulation, any registration is to start a mutual fund blog. Here you can criticise, praise or rubbish a fund. Rubbish a fund manager, scheme, the authorities, and earn money by advertising.

It is in your interest that there a zillion manufacturers, a zillion channels, a zillion distributors – that creates need to advertise. Then it also helps if you are an aggregator – you aggregate distributors and negotiate with the fund house. It also helps if you can provide some kind of qualification – and be a segregator. This helps because if you are willing to ‘honor’ or ‘bestow’ the degree on a distributor, he will pay for it. …..

Given Indian conditions we see how the regulator is trying to increase the net-worth requirement for being in the MF business. Now if you are dependent on advertising, this is bad news. So you have to argue against this increase.

If the number of distributors go down, distributors will not advertise. So you have to argue for increasing the number of distributors (so what if the broker’s terminal operator have not passed the NISM exam nor paid the NISM rent?). If all broker terminals can sell mutual funds, technically fund house assets will go up. Then you buy, sell, re-buy,….creating activity means more money for the brokers, bankers, and perhaps more hits on my blog to see what to buy (Oh! I forgot I am no longer a broker, but a blogger and Google ads do not add up to much)!

Then there is an education provider who is in the lucrative annuity business…