Hi Subra want to discuss my portfolio with you….when is it a good time to call you?

Subra: Lets talk!

C: Subra I have these equity shares, ULIPs, and some mutual funds. I hope you will be able to review all of them for me?

S: Sure. (Giggle giggle I think I know more than you Maam!)

C: Sir who is a Financial Adviser and what does he/she do?

S: Good question. He has an alphabet soup from where he picks up a few alphabets and sticks them to his name. He could give you advise or he could be selling. The industry has appointed a committee to see who does what. The commonly used alphabets are C,A, F, P, W, I, – though the other 18 alphabets could also compete.

C: Sir when I went to the ‘Regulator’ he said ‘You should have done YOUR do diligence’. Sir what does that mean?

S: ha this is a word the industry has coined. It is used to blame you for the lousy products that we design and the regulator puts his stamp.

C: so it would not have mattered even if I had done that….before buying the ULIPs or the mutual funds?

S: Difficult to say. It would have depended on who did it.

C: Sir my equity adviser had said ‘Buy Low sell High’. He had asked me to buy Idbi bank at 184 saying it will soon go to 300, but it came down to 159. I asked him whether to sell it, he said NO. we will average at a 30% fall. So I bought more at 150. In fact he asked me to buy 300 more shares at 150.

S: Oh so your broker is poor in maths too? Hmm….’Buy Low and Sell High’ is excellent advise that all brokers tell the clients. Clients somehow translate that to Buy Low and sell Lower….sad is it not?

C: Sir I bought some more shares of Idbi bank at 133 and 108. Totally now I have 3000 shares but at a much lower average cost of Rs. 139. Only problem the share is priced at 89 today.

S: Excellent. Averaging is the way out. Normally it is the RED way out of the market, but hey way to go!

C: Sir I had invested in Franklin India Prima fund about 9 years ago.


S: Not such a great fund I hear….have not seen too many advisors suggesting that…

C: Sir in 2011 Dec my bank RM asked me to invest Rs. 5, 45,000 from that fund into an infra fund….but Prima got 40%..and infra got 2.6%…..
S: OMG….but what did he tell you which made you do the switch?

C: Sir she said ‘See this fund has done so badly in the past, SO IT WILL CONTINUE TO DO BADLY…’. Sir she also showed me how if I had invested in Icici Pru Discovery I would have done very well.
S: that is fine, so why did you not invest in I Pru Discovery?
C: Sir she changed my mind. She said I Pru D is a very big fund, you should invest in a small fund like Infra.

S: Lady let us talk about your demat account

C: Sir I lost about  10 million from my dad’s account and  2 million from my demat account?

S: How the……?

C: Sir I had left some signed  instruction slips with my broker… he forged the signatures and took it..

S: Did you complain to the regulator, police, etc?

C: but they told me not to have any hopes..

S: OMG..your case is really sad. You have lost money in ULIPs, equities and in mutual funds. God really dealt you difficult cards…

C: What to do sir, bad luck.

S: By the way lady…would you have attended a paid Financial Literacy session ?

C: Sure sir, I would have attended, it would have been so worth while. Sir do you do such sessions?

S: I was just thinking about it…wondering whether I should….
C: Sir how much would it cost?
S: About Rs. 30,000 per person or Rs. 50,000 for a couple.
C: that is TOO MUCH SIR….i was hoping it would be about Rs. 2500…or thereabouts…
S: Yes sure, why it could be free also. However it is a fraction of the cost of financial illiteracy is it not?
C: Sir I did not understand.
S: the money that you LOST because you:
a.    Kept the shares in a broker demat (refusing to act even when you knew it was stupid)
b.    Bought ULIP (which you did not understand)
c.    Lost in Mutual funds because your bank RM fooled you
That figure is about 4.5 million rupees for you and a little more for your dad….to soch lo…

C: Sir since my luck is so bad, I have decided to invest in real estate. After all one can NEVER lose in real estate, right?

S: Maam I do not know….here is the story of a man who knows a little more than you about finance…and surely a lot, lot, lot more than me in finance..please read his short, sweet, sad story


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  1. A chilling tale !!! And scary that a broker got away with forging signatures and with that much amount of money !!!!

  2. Subra Sir,

    Pricing is always irrational hahaha take any industry. The new irrationality is the rational now 🙂 Bring more !!

    Going by the same logic, A nursery to KG 2 should cost a bomb while as student moves up, the cost of education should come down 🙂 sounds irrational? Yes, all the client see it that way.

  3. Too much of fee based financial advisor/planner is suggested. What is the guarantee that this person would not eat food from two plates?. What protection layers are available for the customers if this person play double game.

  4. Hi subra,
    Ditto is our request .. Please plan for a personal finance training session
    Am v keen on attending it as a paid one.

    Am sure there are many among your 3 million fans who want to learn from you in person 🙂

  5. Hi Subra Sir,

    This post is truly an eye opener.

    I just have one question, you have mentioned that:

    Kept the shares in a broker demat (refusing to act even when you knew it was stupid)

    Is it not advisable to keep your shares in the same place where you have a trading account? Even if the account is with one of the top brokerage houses?

    I mean I understand that one has to be vigilant but if such things happen frequently then it is really worth considering one’s holding into a separate demat account.

    Warm Regards,

  6. no praj no. You are much better off leaving your MAIN portfolio in a bank demat account…and your trading portfolio in a broker demat acc. Our regulators have tons of paper, but when there is a fraud or cheating, I have seen the investor looking like an idiot. This is a genuine dialog i had with a person. However i spoke harshly – saying you should have taken care of properly – that he will NEVER come back to me 🙁

  7. Thanks for the clarification, Subra Sir! 🙂

    Will immediately start researching demat accounts…

    Though I hope the person thinks thru objectively of what you said and comes back. It is also worth noting that people are willing to lose 12 million by listening to unsolicited advise but are reluctant to spend a ‘paltry’ sum of 30k for genuine advise. Just reflects the reasons why the retail investor is getting more and more scared of equity markets day by day.

    Warm Regards,

  8. If ppl reallly starts attending paid sessions, they there will be a whole new bunch of ppl who again make a mockery out of it. Like subra sir said it’s we who had to learn ourselves.

  9. Excellent writeup.These kind of sessions can go a long way in helping people IF done with right intentionw.:)

    But wearing my devil’s hat, what is the assurance that some cons wouldnt cheat them through these “paid finace literacy sessions” ?I mean these could be worse than the business channels,and you would pay for it too?…

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