Misselling? Financial Products salesmen are saints!

If you are associated with financial services you know ‘misselling’ is a major problem. So I decided to see how much of misselling happens in other products and is it as damaging. The answer is a resounding yes. The financial services sector has regulators (RBI, SEBI, IRDA) who at least make some noises about misselling. Almost all products have had some kind of regulator scrutiny – you can still get chewed – but the loss at best is financial. Of course I have seen some people who have abdicated financial thinking to their Relationship Managers without understanding the word risk.

A friend who is a famous gynaec told me that abortion pills – to be used under medical supervision – are available across the counter! A 17 year old who does not understand pregnancy (not even how!) gets to buy and use them without physiological or psychological supervision.

A 20 year old daughter of a welder is entrapped by college-MBA entrance class- Bank – MBA institute in Mumbai clique to sign up for an MBA. She saw Economic Times for the first time after she joined her MBA class. She had graduated in Biology (oops!) and done her MBA in finance. Intrigued I probed. She was told (in 2007) ‘the average salary in our institute is Rs. 5 lakhs’ – of course a bio grad did not worry about tax! So on a cashflow of Rs. 40,000 (what she thought) she could afford a Rs. 11000 EMI for her edu loan. Poor kid! She is from Bihar (English is at a premium) the best job offer (the alternative is to tell her parents).

The misselling in this is far, far more serious. She is now a shattered victim who has no clue about what to do.

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One Response to “Misselling? Financial Products salesmen are saints!”

  1. Well said and it’s so true.
    Mis-selling or Mis-buying restricted to just financial products? Sadly no, some examples:
    Shops stack a dizzying array of fairness creams and lotions from home-grown majors and multinationals alike.Fairness creams are a multi-billion rupee industry in India as in India a large population equates fairness with beauty and superiority. Advertisements of fairness cream seem to say “Love makes the world go round … Our gives it a helping hand.”

    A superior course, global exposure, international faculty and dollar salaries… claims many universities. Careers360 investigation on IIPMs Best only in Claims.

    Speak Asia, duped around 23 lakh investors to the tune of Rs 2,000 crore. It promised a weekly income, merely on filling online survey forms

    Why do companies do it? If consumers are irrational it makes sense for companies to cater to that belief rather than eradicate it
    Discussed these and more in my article

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