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Summary: SEBI’s proposed expense‑ratio overhaul didn’t spark a debate. However, the handful of thoughtful responses we received reveal what investors truly care about: clarity, fairness and understanding where every rupee goes. This week’s mailbag captures those voices and the deeper reminder behind them: regulators can simplify costs, but only investors can make them count.
When a Saturday newsletter draws only a handful of replies, it usually means one of two things: either readers had nothing to add, or the column hit a topic so fundamental that most people simply nodded and moved on. This week, it felt like the latter.
The Editor’s Note on SEBI’s proposed expense-ratio overhaul may not have sparked the emotional fireworks of a “fail fast” or “insurance should insure” argument, but the few responses that did come in were pointed, practical and remarkably aligned on one thing: costs matter more than most people want to admit.
And because the response volume was small, the clarity stood out even more.
Before we get to the voices, a quick refresher: expense ratios, the fees you pay for your mutual fund, are one of the very few factors in investing that are predictable, transparent and directly under your control. SEBI’s new proposals on brokerage caps, unbundling charges and removing statutory levies from expense limits won’t change how markets behave, but they will make it easier for investors to see where their money goes.
That’s precisely what readers picked up on.
We pay taxes everywhere—at least make costs clearer
Long-time reader Arvind P cut straight to the core frustration many investors feel: even when you go direct, not all fees are obvious.
“It’s funny at first,” he wrote, “but if a citizen asks, ‘I have paid my taxes on what I have earned and made a bank deposit, then why should I pay a tax on my deposit that is already taxed?’ Why would the government or SEBI accept this?”
He added that investors often have no idea “whether a charge goes to the government, brokerage or the financial institution,” and that SEBI’s intervention is reassuring: “If SEBI is into this, an investor would know that it would benefit the investors for sure.”
For a reader who writes in almost every week, his message this time was simple: costs may be unavoidable, but confusion should not be.
Costs are controllable, but ignoring them is common
Some readers reflected on investor behaviour rather than regulation itself.
Konka Anand Venkatanarasimhulu agreed with the note almost word for word: “Perfectly correct that most investors don’t pay attention to the cost because it makes up a small portion of the big investment amount. Yet, as you said, cost is the controllable part.”
And B Satyandra, writing as both investor and advisor, highlighted a different blind spot—the inequity in how costs fall across the ecosystem. “You may be aware that they are loading GST on IFAs (independent financial advisors) despite the lowest brokerage in financial markets,” he wrote. “AMFI is controlled by AMCs (asset management companies), with no say of IFAs.” A reminder that transparency matters for distributors too, not just retail investors.
SEBI is cleaning the system, but investors still have work to do
Regular respondent Sudha Devi Janga welcomed the regulatory clean-up with relief: “It’s a sigh of relief… that SEBI has finally taken steps to reduce the expenses we are paying. You have done a beautiful job explaining how these charges are bundled.”
But she also used the moment to question an area she believes SEBI hasn’t revisited hard enough: ELSS funds.
Her argument was blunt: “These funds don’t make any sense now… their performance over the years is proof of this. At least make these unavailable for investors.”
Meanwhile, Nandkumar J, another consistent contributor, focused on the structure of incentives itself. He appreciated SEBI’s attempt at “unbundling of fees, hidden charges and making fund houses have performance-linked incentives,” and even floated a proposal of his own:
“Can SEBI introduce expense ratios linked to NAVs (net asset value) with maximum and minimum tariffs? If the investor benefits in returns, he should not shy away from giving a higher commission.”
A controversial thought, but exactly the kind of idea that surfaces when a smaller set of readers writes back with deeply considered opinions.
The message behind the mailbag
Fewer replies don’t mean lower engagement. In fact, they often mean the topic struck a more thoughtful chord.
This week’s responses pointed to something fundamental: regulators can make costs clearer, fairer and harder to hide, but only investors can make costs matter.
Or as readers reminded us in their own ways: transparency is useful, but attention is powerful.
Credits
Arvind P, B Satyandra, Konka Anand Venkatanarasimhulu, Sudha Devi Janga, Nandkumar J
Also read: When insurance tries to be everything, it fails
This article was originally published on November 17, 2025.
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