A few years ago Safalniveshak posted a comment saying his friend’s father was cheated by an agent who had sold him 192 schemes in 192 folios. He called it bad and disgusting. I agree.

Let us look at the whole process. A mutual fund or a life insurance company gets a LICENSE to do business in their respective businesses. They then create products which are cleared (specifically not saying approved because SEBI does not like that word). The sales / marketing team asks for a product, the processing team creates it, then the product is ready. The senior management likes the product, the board of directors approve the product. In case of mutual funds the Trustees approve the product. Then the regulator whets the product. Now they need the people who can / will sell them if they are compensated adequately.

They appoint and TRAIN agents – either independent or tied.

So an approved and trained salesman sells an approved product to a client. If there is a defect in the product OR in the method of selling, who is to be blamed? I do not know.

Why does the ‘agent’ or the bank ‘Relationship Manager’ get blamed by everybody? Most importantly by the press? Yes the same press which will not want to pay me for writing an article, but will be more than happy to put the mug shot of a senior Executive who writes ‘Ulip is a great product’. Most times they forget to put ‘we got paid for putting this column here’ tag. Yes many a times they do put it, but many a times they forget to put it.

Then there are journalists who partly understand the product, but have no clue about the buying process. There are teachers and trainers who have never, ever, ever tried to understand what the clients do. So from their ivory tower they suggest changes which the industry is happy to implement, but know fully well that it will have no impact at all on the process, product, margin, or the end result. There are bankers, agents, who are big enough to know who is sleeping with whom. Like Arun Shourie once told me ‘judging a Journo is impossible’. So over a period of time you make up your mind about people, about the organisations that they represent, etc. Then when you get data to the contrary of what you thought, you do not know whether to trust the data or go back and change the assumption about them. When the lines between the marketing department, the communication head, the PR firm, etc. emerges you say ‘Chuckle..chuckle..is this not the copy I wrote for their CEO’s article?’

Journalists of course know everything that  people tell them. They have no clue about how a client / customer behavior. They have no clue how the client says ‘long term’ and abandons the plan in the first sign of volatility!!

Look at it from the client side. Either he knows and understands what he buys, or he runs the risk. WHERE THE HELL WAS the head of the company who SAW WHAT WAS HAPPENING? The client pays a price for his stupidity, arrogance, indifference – but at least he is the guy who pays the price.

Where are the directors, trustees, regulators, marketing team, trainers, ….why are they NEVER blamed?

Lets face it. The directors, trustees, regulators, marketing staff, editors of news magazines, journalists who are ‘briefed’ about the product in exotic locations, the editors, the trainers, the regulators, everybody  – all of us in the food chain know that it is the product with the maximum margins (by definition worst for the customer) that pays for all the fun.

Surely the higher ups knew what was going on…..or did they not?

Very easy to blame the IFA or the other sales people – but I have NO sympathies at all for the people who use 3 RMs from different banks and buy the SAME PRODUCT from all of them and create 192 folios. Exactly what is called ‘bali ka bakra’ – blame the bakra for everything that goes wrong. Ever heard of ‘bali ka sher’ or ‘bali ka haathi’? does not happen..

Or for that IIT qualified Engineer who bought a life insurance for his daughters without knowing who will pay the premium AFTER his death – he bought this when he was recovering from a heart attack. He had no business talking to an agent when he was physically and emotionally weak.

Or for all those persons who are afraid to face me with their portfolio and their wives at the same time.