Not sure how many of you read about the prosecution of HSBC in UK…

Whenever I speak to big branded banks they tell me how –

– they have a fantastic risk profiling process

– due diligence done on all products, issuers, exchanges….blah, blah, blah

– how the client has to sign off on all documents and how the client is told about ALL the risks in the product

– how they have a fantastic sales audit process because of which bad sales cannot just happen

..blah blah blah

One basic fact is – if there is a conflict between what is good for the client and what is good for the bank (or advisor), what is good for the bank / advisor will prevail. If you have any doubt about this, read this statement again till you understand it.

I have rarely seen a proper sale to an uninformed customer….I hope my friends in these big branded foreign ….see the article. Please do not blame me…it was sent to me by another person who is doing a lot of work in the financial education space..



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  1. Subra Sir,

    I thought these commission based mis-selling happens only in India. I thought western markets(debt and equity) are well regulated, so commissions based incentives wouldn’t be there. But looks like India is far better than these advanced or developed economies. Even though our’s is a developing poor nation, our financial markets are more simplistic(without the inherent derivative financial products) . Also looks like for every ULIP mis-selling in India, there would be be equal or greater mis-selling of bonds + derivative products in the western world, and add to it the commisions are more than 8% there as well. The example of 83 year old person being sold a 5 year locked debt product which may or may not give inflation beating return, seems really shocking. Thanks for the link subra sir, it is an eye opener. Moral of the story is, where ever you go(India, UK, US) if you are investing based on the advice of financial advisor(let him/her belong to global banks or local ones), be very vigilant(always know what his/her incentives are).

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