Last week I happened to meet a lady who is an IFA. She has been selling LIC policies for the past 10 years and has also added mutual funds, government schemes, general insurance, to her portfolio. She lives in a society that has about 130 houses and many of them are her customers.

She does not understand asset allocation, believes that illustrations are gospel truth, believes ELSS has tobe withdrawn in 3 years, believes you can make a lot of money in LIC ULIPs. Mutual funds are all right in the private sector – she is enrolled with NJ investments. However LIC is the way to go in life insurance. She is liked by all of her society members – her staff runs chores like paying all the life insurance premia, etc. By no stretch of imagination she pretends that she knows everything, but she would be aghast if she was told that she is mis-selling. She is like a frog in the well and if there is any mis-selling it is UNKNOWN mis-selling. Her foreign trips to Egypt, Bangkok, and Sri Lanka were all sponsored by one life insurance company – in which her husband is the agent.

In her own building there lives a bureaucrat – he has been associated with the Capital Market industry for the past few decades. He understands everything about asset allocation, reversion to the mean, statistics, mathematics, he has made foreign trips (paid for by the taxpayer), he can write a few tons of material on market volatility. He has utter contempt for the woman mentioned earlier (all agents mis-sell is his refrain). She was stunned when I told her about him – to the building members he is just a retired b’crat. Most members knew a little about him when he once appeared on television – but in Doordarshsan, so not too many people watched.

Amazing – 2 people living in the same building – one unknowingly mis-selling and thinking that she is doing a great service to the ‘society’ in which she lives. Another guy who knows all about cap markets, but keeps his money in bank fixed deposit (he had some units of UTI 64 which became bonds paying 6% interest) – but well protected by an indexed pension.

Who is more useful to society? Take your pick….