When your agent says something you tend to believe it or completely not believe it. This is conditioning – depending on your relationship!
Deepa Venkatraghvan has recently published a book titled “What your financial agent will tell you…and why you shouldn’t listen”. Here is a small summary of the book.
Ever since Dale Carnegie wrote about “How to win friends and influence people” – most authors accept long titles for their books. Deepa, thus is only following a long tradition!
The book is well laid out and the contents are comprehensive. She starts by defining “the agent”. Agents are designated by various companies – certified financial advisor, advisor consultant, certified financial consultant, – there is a veritable alphabet soup out there!
When Deepa says agent she means anybody and everybody who acts as an agent. The agents that she covers in her book includes a mutual fund distributor, insurance agent, insurance broker, stock broker, loan selling agents, recovery agents, real estate agents, bank relationship managers, investment consultants, and portfolio managers. This looks exhaustive – but she has not included postal agents and a new pest in the Indian scenario – the MBA peddler who for a fee pushes B, C and Z grade institutes on unsuspecting parents packed with a ‘student loan’ which is perhaps India’s fastest growing business!
Then she has gone to describe the role of each agent in some detail. The book has taken somewhat of an ‘anti-agent’ stance in the sense that agents are made to look bad. The readers should look at whatever Deepa says as ‘caveats’ – be able to distinguish the good and the bad of what an agent says. Agents are information carriers – stand firm when they push. Currently all agents were selling Nano forms – there is nothing good or bad about Nano! However most agents must have told the owners – ‘Invest Rs. 3000 to book a Nano, you will get a firm allotment and you will get Rs 45,000 ‘on’ so you will make 15 times return’. The product is right, but the story is wrong. In many cases this is an important issue. This book should be able to guide you through the truth and the ‘story’ in the selling.
She has not got judgemental about how an agent should be qualified – she has stuck to the existing facts. This is good because when you are a journalist for some time it is necessary to keep your ‘knowledge ego’ in check. She has done that well.
The style of taking each and every issue and spinning a story or an example will help you identify with real life situation that you may have faced yourself when dealing with agents. Also she has then summarized the learning for the benefit of skimmers who go from the highlights of chapter 1 to highlights of chapter 2!
One more feature of the book is it talks only about the agents giving ‘wrong’ information – it does not talk about the ‘information’ which a life insurance agent hides. To take an example ULIP is an attractive investment only if the premium paid is at least Rs. 10,000 per month. This is because of the high administrative charges – which are in absolute terms – and it hurts policies with smaller premia. In case of real estate she has given an example of an agent about whom she says “This Bangalorean’s agent did not lie. He just concealed the truth”.
However Deepa has laid down the need for another book which should read “what questions should you ask your agent ….before you buy a product” – and by a product she could include education, a gym, a swimming pool….apart from financial products!
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