I happened to meet a lady who is an IFA. She has been selling LIC policies for the past 10+ years and has also added mutual funds, government schemes, general insurance, to her portfolio. She lives in a society that has about 130 houses and many of them are her customers.

She does not understand asset allocation, believes that illustrations are gospel truth, believes ELSS has tobe withdrawn in 3 years, believes you can make a lot of money in LIC ULIPs. Mutual funds are all right in the private sector – she is enrolled with a big broker and she sells under their code. However LIC is the way to go in life insurance. She is liked by all of her society members – her staff runs chores like paying all the life insurance premia, etc. By no stretch of imagination she pretends that she knows everything, but she would be aghast if she was told that she is mis-selling. She is like a frog in the well and if there is any mis-selling it is UNKNOWN mis-selling. Her foreign trips to Egypt, Bangkok, and Sri Lanka were all sponsored by one life insurance company – in which her husband is the agent.

In her own building there lives a bureaucrat – he has been associated with the Capital Market industry for the past few decades. He understands everything about asset allocation, reversion to the mean, statistics, mathematics, he has made foreign trips (paid for by the taxpayer), he can write a few tons of material on market volatility. He has utter contempt for the woman mentioned earlier (all agents mis-sell is his refrain). She was stunned when I told her about him – to the building members he is just a retired b’crat. Most members knew a little about him when he once appeared on television – but in Doordarshsan, so not too many people watched. His wife is also a government employee – and now retired. 2 daughters, both married and have a healthy contempt for anybody connected with equities. The reason they ‘do not mind’ talking to me is because they think the CA degree is an awesome one. Some small mercies.

Amazing – 2 people living in the same building – one unknowingly mis-selling and thinking that she is doing a great service to the ‘society’ in which she lives. Another guy who knows all about cap markets, but keeps his money in bank fixed deposit (he had some units of UTI 64 which became bonds paying 6% interest) – but well protected by an indexed pension.

Who is more useful to society? Take your pick….remember we pay his pension 🙂

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  1. Hi Subra Sir,
    You have told what lady does for living. You haven’t told what bureaucrat did in his working life.
    How can I make any comparison?
    Your indirect question is does the bureaucrat deserve the pension from money of taxpayer. I can’t say anything until what he achieved.

    And on another note, you cannot evaluate government employee on the basis of work done. If that would have been the case then 50% of employees from indian post office would be laid off.

  2. Mis-selling or mis-buying?????

    I know some MBA’s studying students from some 3rd rung colleges in towns who sold want to do some project. The only projects they got is selling some ulips for some insurance companies. They know it’s MISSELLING. So they simply sold these to their reltives nag given back the commiSsion to them and simply quit the MISSELLING after getting required certificate.

    Now about mis-buying, I am seeing many of my colleagues & friends who simply feel that taking an LIC policy (and a home loan) is the financial planning that’s enough. When I tried to suggest ELSS(at least it’s better then a ulip) for 80c they look at me as if I am suggesting to gamble with their money. So I came to know that giving a unrequested or free advice is also wrong.

    When they sell all the heart touching, heart peeling LIC ad’s on tv’s how can people listen to ppl like me 🙂

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