The need for meaningful risk disclaimers4 min read 04 Dec 2017, 12:51 AM IST
The disclaimers need to be easy and simple to understand. More importantly, there needs to be a common disclaimer across all products with similar risks
Robert Kiyosaki, author of Rich Dad, Poor Dad, said, “The biggest risk a person can take is to do nothing." I find this true for many participants of my programme, who are typically working professionals. A majority of them still do not invest in mutual funds and when asked why, the common reply is: “Mutual funds are subject to market risk." Essentially, these investors are scared of losing money and the disclaimer only adds to their fears. What is surprising is that except for mutual funds, the risk disclaimers are not considered important or even remembered for other investment instruments such as insurance, gold schemes, and small savings schemes.
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