Greg Smith’s resignation letter: Lessons from Goldman Sachs
What Greg Smith said in his resignation letter about GS is not a surprise, is it?
How many of you were ‘surprised’ at the tone or the content of that letter? Not sure how this is as a career move for him, but I guess it will work. He will be snapped up by many of the ‘wealth’ management boutiques, and they will flaunt him as the new ‘conscience of the financial services world’…hmmm not surprising is it.
The learning in India is different. How many people have the guts to take on a big Indian company in the financial services?
There are sharks, crocodiles, tigers, panthers in the Indian financial jungles and the victims do not live to tell the tale.
How many Indian executives dare write a letter like Greg did? Do Indian companies not rip off clients? I know one big Indian company which does not deal with its OWN financial arm because they ripped off the company in some deals in the 1980s. Even after 30 years the names do not come out. Are all clients ripped off? No, the big ones are not. At least not openly. There are some clients who can trample you. Or worse, tell your MD and have you sacked. I know banks who will charge a much much interest rate to the CEO of a finance company…..so that some business could be diverted. Amazing stories inside, BUT NONE, NOT EVEN ONE has come out – well not “OP..ED” at least!!
There are finance companies / banks which have told the client ‘3% charges’ and have changed it to 3% p.a. ONLY AND ONLY if the client’s finance head understood what was being said 🙂 . In some cases the difference was passed on to the finance head. Has anybody complained? Will he? does he have the guts? Whistleblowers are killed. Simple.
I know the case where an arm of a big brand was doing something wrong. One of the kids working there wanted to tell the Group Chairman about it. Poor kid was idealistic. I took him to a friend who knew the chairman – he said ‘just shut up and move on’. The messenger is usually shot. He did move on and did not squeal.
Greg may have said it after collecting salaries (and huge GS bonuses) for 12 years. Indian managers do not.
Indian environment does not entertain ‘mischief mongers’. God bless.
Prashanth
Subra,
Greg Smith might not be snapped up only to be portrayed as “the conscience”. His move seems like a suicidal one!
What he most likely will get is a contract to write a book and expose the underbelly, if any!
Deepak
Subra,
Just to give you another example of what misselling happens – a cousin of mine ( not very financially savvy) took his relationship manager’s advice to invest in SIP’s since they are like ‘RD – but with more chance of upside’ – and he has been telling me for the last 4 years he is investing in SIP’s. I didnt bother to ask him much, this weekend he says how he has huge losses – I was a little surprised since he had told me his funds which were HDFC 200, HDFC equity, Franklin Prima etc – I asked to see his statement and realised every year all his SIP’s are redeemed and reinvested and fresh SIP created – exit loads hitting full force. He has been told SIP’s ‘mature’ and need to be taken out and re-invested – He is a fool I agree and needs to pay this fee to learn but this is outright fraud in my books..anyways – one more anecdote for your next book
param
“every year all his SIP’s are redeemed and reinvested and fresh SIP created” – what kind of a deal has he signed? does the RM ask him to sign the redemption & fresh investment form each time & still the guy could not figure it out? or was it a PoA signed without understanding the consequences? or did he just share his online inv. account user/pwd???
subra
Deepak / Param,
this is not uncommon at all. Worse than this people are sold ‘life insurance policies for 3 years’. Then the client is told, see it has matured.
Another way is to say..’see your unit linked policy has invested in units which have a NAV of 44…’ please redeem this and invest in a new ULIP which has a nav of Rs. 10.
if you walk in with a board saying ‘I am a……take my ……’ people will.
My classmates, cousins, friends all of them do it. Is it ego or secrecy which stops them from asking me, I DO NOT KNOW. Earlier I used to get upset, now I can laugh 🙂 When I see a person with a lot of money lose money like this, I realised it is God’s way of taking back some of the excesses…LOL
Jayachandran
I was enlightened very recently after reading books/ blogs about personal finance management . After that I realized how many LIC A/B/C…i have taken thinking of it as a greatest investment I made ever . (all are endowment )nearly20k premium every annum.
It’s been 4years now . Not even. A single term policy :(.
But I cannot blame much about the guy who sold me 🙁 .
I was illiterate / stupid/ lazy and I paid for my mistakes now .
anon
Horrified. Both at the comments and the chairman wala tale.
Suresh
Enough material in this post for Rocket Singh Dwitiya !