“In a recent incident, a senior citizen, a retired General Manager of a private sector company who had invested his retirement benefits in Fixed Deposits with one Private Sector bank was convinced by the bank’s representative to invest Rs. 2 lakh in an investment scheme assuring his funds would earn a minimum 11% interest and there would be no deduction of income tax upon withdrawal after three years. Another representative from the same bank visited the depositor after a period of one year from the initial investment and convinced him to prematurely close three FDs aggregating Rs. 7 lakh and invest the proceeds in the same scheme. After completion of three years the customer found that he had earned only about 3.5% returns. The representative is no longer in the service of the bank and the customer is in a hapless position. This is a clear case of selling of a product which was not suitable to the needs of the customer. A retired person needs a secure and steady return on investments and any financial product, where returns are not assured, is not suitable for such customer.”

Ravi Samlad wrote about this in Cafemutual.

Now lets look at the GM of a pvt sector company. Should he have gone to a bank with zero preparation? He would have assumed that he knows everything. Who will tell that joker “Forget what the banker told you…but where the @#$%^&* was your brain?

People think when they get a lump sum amount of money, God sends them some banker genes. When I need to buy a car, I pick up the phone and ask the editor of a Car and Bike magazine. When I want to buy a phone I call a guy who deals in phones. When I want to take a vacation I ask a friend who is damn good at travel. My camera adviser is a pro photographer.

Now this brilliant man

did not understand what he was buying

he did not ask how 11% assured return

he did not get anything in writing saying “he will get 11% return”

AND THEN LOOK AT THE LAST LINE.

The last line is the advice being given by the Deputy Governor of RBI. Amazing. If that is the criteria every IFA will be guilty of mis-selling of mutual funds to a retired person. Who will explain ‘real returns’ to the Deputy Governor of RBI?

The more Baboo(n)s you meet, the more scary you get. Met one Secretary level Baboo(n). The way he was talking about financial planning was stunning. Of all topics in the world, ‘share market’ and ‘financial planning’ are the best. Every man who has a forehead has a view…and strong views at that…