By Uppai Mappla
Cartoon source: Economic Times |
FINANCIAL ADVISOR enters. He is
in his mid-twenties, smartly dressed in black pants a pinstriped shirt. He
arrives in a motorcycle with a junior advisor, similarly turned out. They have
between them a black leatherette briefcase stuffed with papers.
We chat and make each other comfortable. I learn that both are MBA (Finance). Six months ago the senior advisor left a multinational company since “India is growing Sir.” The senior advisor appraises me, my living space and my family. Finally he admires my cat, and I realize he is ready to talk business.
We chat and make each other comfortable. I learn that both are MBA (Finance). Six months ago the senior advisor left a multinational company since “India is growing Sir.” The senior advisor appraises me, my living space and my family. Finally he admires my cat, and I realize he is ready to talk business.
Advisor:
Sir, I have a great investment product for you Sir,
a ULIP, guaranteed to double in two years and with insurance protection. (He
gives me a printed brochure.)
I am instantly hooked. The brochure that
glides of its cover is a beauty. And the typography! Indian publishing industry has indeed arrived.
UppaiMappla: (my fingers running all over the pages) Amazing!
Observing my capitulation the Advisor
moves in for instant kill. He yanks the brochure open at the last page to
reveal an application form.
Advisor:
Sign here Sir with a cheque for Rs. Xxxxxx/- and let
me take care of it for you.
Uppai: Don’t you want to know my age, medical status . . . ?
Advisor:
No sir, nothing at this stage. Just sign and let me
take care of the matter sir. And Sir, please make the cheque payable to XYZ insurance
company Sir.
Uppai: I need to think a bit. You see I have already term insurances on
life and health.
The Advisor deprecates my financial
folly of insuring my life as if it were an automobile. He explains how the
entire insurance money will go waste if “nothing happens to you Sir.”
Advisor:
(finally backing off) While you rethink the ULIP
Sir, here is a wonderful NFO that closed yesterday.
Uppai: NFO?
Advisor:
(recites) NFO means “New Fund Offer.” Each unit is available
to you at Rs.10 whereas existing mutual funds are ten times costly. All these
mutual funds invest in the same market. All investors are moving from old
mutual funds to NFOs to maximize their returns. Imagine the return you will make
with this NFO Sir!
Uppai: Amazing. Um, do you by any chance recommend an index fund?
Advisor:
What?
Uppai: You know the Nifty, Sensex fund.
Advisor:
(after the briefest hesitation) Sensex 22,000
Sir. NFO is only Rs.10 Sir, No comparison! And we don’t know where Sensex will go
next year, do we Sir?
Uppai: So I can look forward to this Rs. 10/- NFO to become 22,000 soon? How brilliant. Anything
else?
Advisor:
Here's an exquisite close-ended Real Estate Scheme
fund Sir. After three years your money triples. See the way the real estate is
going up, up Sir!
(I glance out of my window at the tall flat
complex right in front of my house where some 25 flats from a total of 116 are occupied. The developer’s desperate banner flaps in the wind “Grab the Last Chance!
Only TWO flats to go!”)
Uppai: (pointing) See those flats seem empty.
Advisor:
(realizing I am chicken) Sir, you are wise and
risk averse. I have the right product for thoughtful people like you Sir.
Uppai: Do you now?
Advisor: (fishes out
another brochure, much used and faded. Possibly that is his only copy. Must be very exclusive.) Our portfolio management scheme. Very must an in-house thing, only for HNIs. Minimum
investment is Rupees One Crore but if you opt for our ULIP I can get it for you for
Rs. 5 lakhs. PMS is an amazing product, Sir. It can go 100% into equity when the market
is down and 100% debt when the market is up – just like that. (punches an imaginary keyboard miming how the fund manager goes in a trice from 100% stocks to 100% debt.)
Junior
Advisor (interrupting shrilly): And our Peeyemmes fund
manager is an Ayyeyyem product, Sir!
Uppai: Ayyeyyem product?
Senior
Advisor: Sir,
IIM, Indian Institute of Management.
Uppai (disappointed): Oh, that means you two are not from IIM?
Advisor: No Sir. Annamalai. Same syllabus.
Uppai: But of course! Ayyeyyem, Annamalai, the same thing! May I ask, if your PMS is going to zoom up like you said, won’t I have to pay capital gains tax? And what about tax in real
estate fund?
Advisor: (shocked at my
ignorance) Both the funds three years lock-in Sir!
Uppai: No LTCGT even for your PMS and real estate funds?
Junior Advisor pipes up again: No Sir! India has no long term capital gains tax – Palaniyappan Sir – from my village. (modestly studies his fingernails).
Junior Advisor pipes up again: No Sir! India has no long term capital gains tax – Palaniyappan Sir – from my village. (modestly studies his fingernails).
Uppai: (slapping my head): Palaniyappan of course! Fancy your hailing from
Finance Minister’s village. Your funds must have personal protection from him. That settles things. By the way, could I get back to you? I need to discuss this with my partner.
My partner Mr Divakaran is is at my heels
mewing for fish.
Advisor: (fatally ignoring my partner)
Shall I come today evening Sir?
Uppai: I have your card. I will call you when I am ready. OK?
Advisor: I wait for your
call Sir. Thank you Sir. You are making the right decision, I know. (gets up to leave.)
Uppai: Oh, you said you worked for a multinational company six
months ago before joining Indian financial sector? Which one?
Advisor: Canon Sir. I was
in charge of entire Tamil Nadu and Kerala.
Uppai: (indicating the Junior Advisor) What about him?
Advisor: Sir, he was in a multinational.
Uppai: Oh. Which one?
Junior Advisor: Nestle Sir. Maggi Noodles. (Senior Advisor flinches.)
Uppai: (indicating the Junior Advisor) What about him?
Advisor: Sir, he was in a multinational.
Uppai: Oh. Which one?
Junior Advisor: Nestle Sir. Maggi Noodles. (Senior Advisor flinches.)
Uppai: Canon and Nestle! Great companies.
Both Advisors: Thank you Sir. See you tomorrow! (Waves patronizingly to Divakaran.)
Both Advisors: Thank you Sir. See you tomorrow! (Waves patronizingly to Divakaran.)
(Exeunt)
Partner Divakaran bidding goodbye to financial advisors. |
Note:
Out of the more than hundred financial advisors I have met in the last ten years, I have found only TWO -- yes, just two -- who really understood finance, and most importantly, were willing to teach me the basics of economics and finance without caring for their commissions : (1) Vinu Mammen, ten years ago with ICICI Bank, and (2) Vinson Victor, five years ago with JRG Securities. This note is not a personal recommendation for them, but a spontaneous expression of hope for a minuscule minority of young, honest high-flyers in financial advising profession in India.
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This work (text only) by Sajjeev Antony is licensed under a Creative Commons Attribution 4.0 International License.