The Financial Literacy program should start at the Finance Ministry. The FM says ‘Insurance Industry suffers …because of mis-selling’. Bang on.

If LIC does not mis-sell and collect huge premia on endowment plans (by the way ULIPs are just a form of endowment plans), who will bail out the PSU companies coming out with IPOs, FPOs, …etc.

Who, Mr. FM, will bail out your bank NPAs?

Who, Mr. FM, will bail out Kingfisher – directly or indirectly?

Where did the Mundhra scam originate? In Ulips?

What went wrong with UTI? did they sell ulips?

Have a heart, do not torture the numbers so much that they confess to anything. Yes sure Ulips were a brilliant mis selling tool, but mis selling has always been around.

Mis selling does not happen because some kid who is 12th class pass is doing it.

Mis-selling happens because big educated men and women sitting in Board Rooms create terrible products with 55% upfront commission.

Mis-selling happens because regulators obfuscate. Repeat obfuscate.

Mis-selling happens because SEBI creates a 100 page document called Offer Document, but the IRDA does not think that the customer needs ANYTHING at all.

Mis-selling happens because of the apathetic customer who just asks ‘where should I sign’

Mis-selling happens because when Debashis Basu and Sucheta Dalal want information about the forthcoming scam a.k.a Portfolio Management Scheme, they have to spend their OWN MONEY and take the regulator to court

Mis-selling happens because to understand what the regulator says, people have to attend a 5 year communication course, before they can begin to decipher.

Mis-selling happens because financial journalism (like many other things) dances to the piper’s tune. We all know that he who pays the piper calls the tune. Sad part is many of the dancers are stone deaf, they are just dancing to the beat based on what the others are doing.

Let me add just one thing. ULIPs are far, far superior to the traditional plans that the Old Lady of 1956 sells. Sad part there is nobody left in journalism who wants to write about that in the main press. Satyameva Jayate.


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  1. I think the keyword is ‘Mis-buying’. It is ultimately the responsibility of the person to check things (yes, there are so many things to understand as you told about at least 5 years of education to understand the terms But still…). By being lazy about putting things at the very last minute (or say last month), by having unrealistic expectations from investments (Double in 3 years) and by being ‘hot money’, people mis-buy.
    If people stop buying what is being sold to them, and instead buy after understanding ‘a bit’, things will be less problematic for them.
    Call it naive thinking or impractical. Even I understand this is not going to happen in a big way EVER.

  2. “mis-buy” is happening becoz of lack of basic financial education also…….i will take my own example as an 18 yr old i had no clue about mutual funds,sip and stuff….basic concepts like compounding……role of inflation etc…knew nothing…..this has to be part of school curriculum….so that we are prepared to handle money

  3. Well said!! it is the only superior people who makes money and also the regulators are very keen in approving such type of products!!
    Superb said!!

  4. I concur with Ramesh’s &Nikhil’s views on ULIPS. one should not abdicate his control over where to invest his own money to some one else. No matter how strong the pressure is.Balanced fund is better than a ULIP in certain circumstances. Why do they say that ”Please read the offer document carefully”.RM has got his incentive in front of him.See for yourself.

  5. Misselling is the main culprit followed by gullible individuals who trust their “friends and well wishers” (read persistent sellers) more than common sense and basic calculations.
    Our Laziness to even ask or read the fine prints on the form comes next.
    Followed by it is our way of life according to which every financial planning is done at the eleventh hour.
    I strongly feel that the concept of Tax exemption for Life Insurance policies should be withdrawn . It should be mandatory for every company to offer pure Term insurance plans as the first option for all and all basic things like opening Bank accounts , applying for PAN cards, IT returns , etc. should have a small component of money which should take care of the proportionate term insurance premium.
    I really hope it becomes a realty one day .

  6. “Mis-selling happens because of the apathetic customer who just asks ‘where should I sign’

    necessary and sufficient cause. there is misselling happening in the subzi mandi too. but we know how indians love to haggle and play the bargaining game with subziwallas.

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