Your banker tells you an account has no fees, but later you find yourself charged a fee for “opening charges”. A broker tells you they charge you X, but you get charged 5X as other charges. A mutual fund distributor conveniently forgets to tell you that there’s a 1% exit load if you leave within two years. Your insurance agent opens his mouth, and everything that he’s said turns out to be a lie.
I get mails and calls about this, way too often for comfort. These are not one-off; lies are par-for-the-course. You will NEVER hear the correct story from the guy who sells you a product – on the pretext that you don’t ask your barber if you need a haircut. But my barber – not in a fancy shop – often tells me stuff that doesn’t gel (sorry) with his business; he told me not to dye my hair until I got into salt and pepper mode. He tells me I don’t need a haircut for a month. He tells me this because it brings me back, because I don’t feel he’s a money obsessed slimeball.
But I don’t get that feeling from the financial industry. They lie with suits on. Without compulsion, without remorse. They lie in not just telling you untruths; they lie by not telling you enough, by leaving out vital pieces of information that could make you rethink. They peddle complex products that are only so in order to confuse you. They behave differently after you’ve bought the product.
This takes away the element of trust necessary for people to buy products. So they don’t.
Mutual funds are draining money. Stock market volumes are pathetically low. In Insurance, new premiums are dropping. No one wants to buy products that involve a risk – because the risk is not just in the product, it’s also in the slimeball banker not telling you about high expense ratios, high fees or better competitive products. If the market goes down you’ll lose money, and sometimes when the market goes up also, in certain insurance products, you’ll lose money.
You can buy insurance, but when you go to claim, they don’t want to pay out. They fight and resist and act as if they’re doing you a favour.
Pension funds are a waste; they force you to buy an annuity when you retire, which steals EVEN MORE of your money. There is no honour in banking and finance anymore – it’s man-eat-man, and in that case, our money is best left in a savings account of a fixed deposit.
If this is a time for an Anna Hazare in politics, this is also the time for the big change in finance. A financial service company that proposes to be honest. That fires lying bankers with zero notice. That insures and pays out properly, and in cases of a catastrophe, even without being prompted. A bank that gives credit and also helps related customers do business together, insurers that do discounted health programs. (Of the lot, the mutual funds are the best of the lot – most are, or are forced to be honest.) A bank that offers accounts to poor people in urban areas. We don’t need regulation – we just need a good player to change things. If there are those that exist, please let me know.
