Unfortunately in India most customers crib, then when they get a pat on the back from a high ranking official, they withdraw their complaint. I am yet to see a court order a full repayment for mis-sold policy and heavy damages suits.

There is no fear of God in ANY company. If you do bring up the issue of mis-selling to ANY  CxO in the industry he comes up with “Oh ‘A’ is doing more than us or ‘L’ is doing more than ‘M’.

So will mis selling stop on its own? No. People behave in a way that they have been rewarded in the past (or at least not punished). So in a country where :

– the customer is so damn indifferent that he does not even know he has been sold a lemon

– the courts take forever to award penalties for such ‘minor’ offences

– the regulator has made the process of getting justice difficult

WHY oh why will a guy NOT mis-sell?

Into this scenario a financial services company has come out with an incentive system which will pay a bonus to a sales guy if :

– he can get 5 leads from existing clients

– more bonus if he can SELL more to the same client (normally companies insist on no. of  new clients brought ..)

– get clients for a meeting with product heads / risk heads  once in a while to explain their portfolio.

Sounds utopian? They also have a good system for internal counsel meetings for reducing mis-selling by an informal whistling system.

Why do all this?

Parent country where they are located is cracking the whip on bad behavior.

Will it work?

Too early to say, but short term profitability could suffer. Fantastic opportunity for trainers. Hey trainers are you listening?

Trainers polish your English, give international examples, speak slowly….look east!!

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  1. no Shankar this itself is too much. Hope their compliance or PR do not call me saying ‘why this post’…..It may be a needle in the haystack but if you run a magnet on the haystack…..LOL!!

  2. Just wanted to share a small incident which happened with me recently when I waked into a bank to submit KYC documents. I could see MIHY person being extra couteous to me and I could sense a sale pitch coming to me.

    As suspected he came with “an excellent” investment plan that will make me rich if I invest 1lak for just 7 years and stay there for 15 years and with free insurance. I asked him if he is trying to sell me a ULIP, he said couteously it is free insurance no charges. 🙂

    He gave me an illustration on how much I will get after 15 years along with split of “guaranteed” adition year on year. I closely looked at guranteed addition amounts to 95k per every 1lak invested. I asked where they invest to get 95% return, he said govt bonds. When I probed names of govt bonds which give more than 10% return he went to seek help from his colleague. His colleague came in and suggested that over all after 15 years guaranteed 15% return plus insurance and he went on to claim that money is not invested bonds but it would be given as loans to bank customers.

    My then I understood that they are either not sure of the product at all or they are trying to missell. I asked both of them to prove that end number they have shown as indicative return is better than what PPF gives then I will buy the product. They confidently said yes but when I have shown then what PPF offers is more than what they have claimed as 15% retrun they were struggling for words.

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