I frequent 2 banks and a couple of fund houses. When I was sitting with a young chit of a girl in one of the banks an elderly lady walked in. She had shares which she had presumably inherited from her late husband.

She had a simple question to ask ‘which shares should I keep and which should I sell’. If I sell those shares what should I do with the money.

Fair enough, simple question. Completely wrong person to ask. Or was it not so bad after all?

That girl saw the list and asked her “what is the price at which your husband bought these shares?”. That lady had no clue. So the girl smartly asked her ‘do you have the contracts or do you know when he bought the shares’. The lady said ‘at least 3-4 years he was not well and not active so he must have bought it in 2011-12. Again no clue.

So the girl said “it is long term so all the shares you should sell”. The lady had no clue what to do with the money either.

So the first share that they wished to sell was JSW steel because it had gone up too much. By the time this was being discussed my work was over.

In the second case one man came to invest for…a two year term.

This girl at the counter of the amc had not clue what to do with this person who was perhaps a first time investor and had a lot of money. So she said…’xyz midcap…fund’ . That man filled up the kyc form, the application form, wrote out the cheque and left.

The girl had absolutely no explanation about why she asked him to invest in an equity fund, and that too a small and midcap fund and that too for 2 years.

Remember she had NO VESTED INTEREST AT ALL – she was not getting a commission, she did not have a sales KRA, yes she had passed the distributor/ employee exam but she did not consider herself competent. Only one fund house has trained the employee to say ‘sir mutual fund investing is risky, nav can fluctuate, you need to understand the fluctuations in price…before investing..please consider learning or using an adviser’. Not all fund houses do that.

The first girl was a bank employee sitting at the Dmat counter and the second girl was an employee sitting in an amc branch office. Both of them did not have a sales kra. They just wanted to help. Nobody told them that they were completely incompetent to sell  a mutual fund – there was no express prohibition.

Thus we are now unleashing on our investors a new group of unintended advisers who have no clue about asset allocation, risk profiling, investment suitability and our regulators seem not to care.