I was suspecting this all along and exactly the reason why I hardly
ever invest in mutual funds. To those who solicited my custom (especially
the executives at ICICI and HDFC Mutual Funds whom I had to sadly turn down each time they cold call me) I pop the question "will you charge me even
if my portfolio created by you wilts under water...?" Their reply has always
been in the affirmative and that was something that I could never digest. This
spurred me on to quit my job and start my own investment management
business with a spunky slogan "...We wouldn't charge you unless we
help make enough for yourself..." I can proudly claim that I'd
been keeping up that promise.
All my clients will swear by that, something that helps me effortlessly wean
away clients that got creamed by portfolio managers and mutual funds and sincerely hope they keep going down that one way street so that my business is in tact, ethically miles ahead of them...!!!