Sebi Chairman C B Bhave today urged neutral agencies like regulators, media, etc to educate investors from being trapped by financial services providers and their wily sales agents.
"Neutral agencies like the media, regulators and other self-regulated bodies add more value...They make an effort to let investors see both the sides," Bhave told a seminar on investor education here today.
Intermediaries having an interest in financial products do educate the people, Bhave said, but pointed out that they tend to overlook the flip side. He cited the example of derivative products where investors are told how much money they can make if the stock rises, but are not told about what happens when the stock falls and how their losses mount.
Bhave also stressed the need for matching the risk profile of investors and the risk coming with the product while selling, and said, "different classes of investors need different kinds of education...A retired person's risk profile is different from that of a student".
The Sebi chief also asked these nuetral agencies to target one such group of investors at a time when it comes to education and avoid having generic programmes.
"Emphasis must also be given to educating investors in the language they understand, and hence, it will be beneficial if regional languages are also used," he said.