Yesterday a cousin had to convert a pension plan to an annuity, and he had sought my advise. He had an accumulation of a small amount to be converted.

They had sent him a form to his residence – he had filled it up and brought it. The form was complete in all respects…so he (we) thought it would take about 10 minutes to walk out.

How wrong were we!

We had to fill up a new form (Sir the form was changed in April, 2013) – this form was sent in March.

So he had to fill in the form again. No issues it took about 30 minutes to fill up the form. ALL THE DETAILS ASKED FOR WERE AVAILABLE with the insurance company.

Name, father’s name, address, date of birth….

then they wanted an address proof (they had taken it when they sold the policy), pan card (ditto), they wanted a photocopy of the cheque (same account from where the premium was being paid).

THEN THEY WANTED A KNOW YOUR CUSTOMER form to be filled in ! This got my goat. They had all the details as required by the KYC FORM.

Why the hell, could the life insurance company not pre-populate the forms? Why could they not send a pre-populated form to the customer after asking him on phone whether there are any changes at all?

I have a nice explanation – from a sales guy. Reads a lot like an Ayn Rand rant!!

Over the past 5 years the number of sales people has dropped dramatically. However the ratio of sales people to total number of employees has fallen far far more dramatically. When the number of productive people are reduced, the non productive people NEED TO KEEP THEMSELVES busy. So the people in audit, cost control, training, accounts, HR, operations, etc.

These people have to justify their existence, so they create forms. Sales guys are less in number and are not doing well in sales – this means they cannot now protest loudly. Terrible combination.

The BFSI industry should realise that the client is screaming because

a) he has been sold a lemon (of course the commission has been paid out),

b) he gets pathetic advice

c) he gets an indifferent company which never gives the feeling that he is wanted

d) they guy who sold him the policy is now not calling on him AT ALL.

Mr. Suresh Mahalingam of Tata Aig Life Insurance  and Mr. Amitabh Chaudhary of Hdfc life insurance may not be able to do anything about the fact that the client has been sold a lemon but they can surely improve the internal processes.

I am also convinced that equity fund management skills do not exist in the industry. Thank God for falling interest rates…hopefully the debt funds will perform and give returns for some time…..

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  1. India’s cultural paradigm is, find out who has the money, then fool him into parting with it. That way, the guys who got the money can have a hearty laugh at the guy whom they fooled, and feel intelligent themselves. Indian organizational culture is not about providing a world class product or service, it is rather about finding where the money is and then using sophisticated intellectual, and emotional techniques (greed, fear and extortion) to dupe the holder of capital from parting with his money.

    No wonder India does not build capital, at the governmental levels, and at the familial level. Except a few corporates.

  2. You said it Rajaram.

    This is the one and only truth ruling Indian Economy.
    You see it everywhere.(Banks,Insurance,MF….)
    And the sad fact is that it works!!!

  3. i, as a lic pension plan holder need to give certificate of still living signed by self in presence banker/ lic officer every five years. the pension on a/m returnable to nominee in case of pensioner’s death is @7% p.a.. what is the logic for a commercial entity? just keep the pensioner engaged!

  4. Now since the market starting to fall people are panicking. Who all are panicking?

    1. Corrupt politicians
    2. Cheat corporate
    3. Mafia Real Estate
    4. Broker Media
    5. Finally the common man who is conned/induced into investment in Real Estate by the above 4

    In addition to this list, the so called financial analysts also panicking and started talking that new reforms will help stopping the fall. But in my mango opinion nothing can stop the upcoming catastrophe. Indian Government and its puppet RBI has exhausted all their options and are watching the crash of Rupee helplessly last week.

    If a finance minister come on Tv to assuage investor once in a year it is normal and thereby he can command come respect in the market place. But our finance minister come on TV every week whenever there is a fall of 20 points in the index. This is comical. Markets stopped responding to his gimmicks. Last week Raghuram Rajan was given the tough task of convincing markets. Poor Man. What can he do?

    Now coming back to reform stuff, I do not see any need for reform. What is needed in couple of percentage points of rise in Interest rates. A small hole in Real Estate Bubble. Some tightening of income tax rules and compliance. This is enough

    Some time the so-called experts will over think and over do things and make seemingly simple things complex. That is what happening now.

    Rupee / FII / Bond

    Simply put now RBI is in dilemma and effectively check mated. If you had observed carefully the rate cut lobby is shutting all its holes in the body last week after the spectacular fall of Rupee. Now Subbarao will give a punch in the face for whoever asks for a rate. RBI is almost knocked out by the vicious cycle of bond returns and Repo rate.

    If they reduce repo rate, FII who are already making loss will make further loss, and hence will go out of India.

    If they increase repo rate, it appears atleast 75% of top corporate honcho will go on indefinite strike. ( have you ever seen Tata begs for rate cut? I did not. That is the difference between real business man and reel business man

    RBI did not cut rates because they cannot cut now.

    Nifty Index View

    After Bernanke speech many would have observed huge FII selling in bonds and stocks. Stock selling started late but catching up fast now. Friday I saw huge sell figure from FII desk. Let us hope this continues. I am looking for some cheap puts and I think we can easily see 4500 – 4800 in nifty very soon. I mean as early as this year end.

    Real Estate Effect

    RBI may raise rate or not. Liquidity will dry and Real Estate sharks will run for cover. The tide is going to retreat and we will all see who is swimming naked. That will be interesting. Already I see many ‘ to let ‘ boards in many business establishments in Bangalore. Let us wait for the cleansing act and hope for a good beginning after the upcoming crash

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