Recently a friend passed on an article by Ajit Dayal – Evolution of the barber – or something like that. To summarise the article Ajit had said when he was young he went to a barber he said “chop it off” and the job was done. However today the barber tries to sell you gel, hair cream,…and the works.

This was surely a well written article – Ajit Dayal does write well always.

However the story obviously was taking a dig at the bankers of today. The evolution is from the owner to the relationship manager. I used to be a member of the National Stock exchange (O.k. technically I was a director of a company which was a member in the capital market segment). Sometime in 1999-2000 we saw the death of the owner and the birth of the relationship manager. This was difficult for some of us.

When we asked a client to buy a share and said ‘long term’ we meant about 5 years plus. When we said short term we meant about 2-3 years. Traders were scoffed at (even though they were the guys paying our bills). The chairman would review ALL ACCOUNTS which lost in 3-4 successive settlements. Clients were regularly chucked out (imagine throwing clients out for losing money!). Broking was a means to create wealth for customers. Wealth meant wealth for the family – portfolios were held forever. You got more clients because clients brought clients – no sales staff, no PR department, no customer complaint cell (if a customer complained all of us attended to it). When you operate on such a high ego, commitment, and relationships (3 generations were common) you had to be inefficient! When you researched a company and the client lost money you waived the brokerage when he sold. If he bought through you during an IPO you sold without brokerage. If the firm made a mistake you hid it in the ‘mistake account’ (vanda account if you wanted to know what it was actually called).

Today the relationship manager calls and says – we invested your money in Nifty! If you ask him why he says ‘because there was a balance’. Your lawyer tells you the RM is allowed to do this! Did you not read clause 27 on page 14 font size 7? Well you know you have been had. When you buy a lemon you do not cry about the cost of lemonade.

Your taxi driver tells you how Meru is superior to King Fisher and Jet Airways. Your barber sells you gel. Your physical trainer sells you the services of the dietician. Your doctor (if he is in a hospital forces you to go for a stomach scan before he can pull your toe nail out) if he is visiting you in a hospital he tells you why you should see him in his personal clinic. Thank God I have stayed away from allopaths for the past 27 years.

Your CA wants to sell you an unit linked policy, and his wife wants to sell you an Amway agency. Your broker is interested in churning your portfolio, your mutual fund churns its portfolio 2.35 times a year (this is like having a new time every tournament – twice a year!).

The shift is clear. The owner built the business for himself, his son and for generations. The RM is building his CV. When he changes his job he says “Sir I left that X (bank, brokerage house, life insurance, …) because of the pressure” . The client says “You s…..d my money, not yours dammit”!!

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