During the course of my meetings with my clients, I do come across interesting situations. The client , ( Mr A) has a bank account with a leading private sector bank and is one of the premium customers of the bank. Being a premium customer, he has a dedicated Relationship Manager (RM). The RM is the one-stop person who will help , guide ( in making investments and choosing the right product) and resolve the issues , if any.
Mr. A had a balance in few lakhs in his account , which prompted his RM to guide him to make an investment . In the past the RM had invested his monies majorly in NFO’s of mutual funds, which at current levels have not exceeded the Benchmark return.
Now, in one of my meeting with Mr.A, he had also invited the RM , as he had advised him to invest in a Savings Plan , exclusively for the Bank customers. On further questioning, it turned out to be an insurance product of one of the group companies and being sold in the grab of a savings plan. ( Do ask yourself , Is this is cheating ).
Mr. A has sufficient insurance and there was this product which was being sold as a Savings plan. And this was being sold by the RM, who is supposed to guide his client to make the most appropriate investment decision. And what we observe, is the RM guiding the client to make the investment, based on the bank’s target for the month , as against the clients needs.
There are many such cases and there will be many more cases , when dealing with RM’s. ( Let me also state that not all RM’s display the above traits. However, I have also not come across any RM’s who have not displayed the above traits)
Is there a way out?
Absolutely . Find an adviser who charges a fair fee for the advise and suggests investment advise based on the clients need and requirement. Moreover, he should be transparent and also declare his incentive on any product recommendations. Be willing to pay a fee. This would ensure that a wrong product is not bought, which has greater implications in the long run.
Happy Investing
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