Misselling or Misbuying – What’s your case ?

POSTED BY manish ON September 27, 2012 COMMENTS (55)

Misselling is a very common word used these days by everyone. It’s been projected in such a way for the last few years that people have started feeling all agents and companies are engaged in looting the public. But maybe there’s another angle to this and maybe we need think a bit & answer a big question – Is it misselling or misbuying?

  • “I was mis-sold a financial product”
  • “Agent made me buy this crap and now he is not agreeing to it”
  • “My trusted friend mis-sold me idiotic policy promising high returns”

What is Misbuying ?

The first question we need to ask is – How can some one sell you something if you do not want to buy it? Can anyone come to you and put a gun on your head and make you buy? If that happens, I think anyone is bound to agree that it was mis-selling. However, when someone buys a financial product without proper research; or without understanding what they are buying, I would say its more of “mis-buying”. By no means do I want to say that agents and companies are not at fault. If you have not understood the product and bought it, just because some one said some thing verbally or showed you some fancy chart, you need to question it first, inquire about it before buying it and understand the whole dynamics which govern the financial product.

Misselling – What about Investor’s trust ?

While its true that a customer has to do his own research and study, we cant say that companies and the product sellers are not at fault . What about “trust” from the customers who feel that companies will take care of trust part being into business, but most of the times, companies don’t accept the fault on their side by stressing on “Buyer’s Beware” points.

Misselling vs Misbuying

Seth Godin has a very crisp point to make on that.

“Buyer beware”

Really? Is that really the attitude you want your audience to take? That they should be wary of what you say and what you offer and what you promise?

How about “buyer trust”?

How do you deal with customer disappointment or buyer remorse? It’s the difference between “tough luck, you should have read the fine print” and “oh no! How can we help?” If people know you will always make it right, they will beware less and trust more. What do you have to do to create trust? How much would it cost and how often can you produce it?

Dr Kishan has made a very beautiful comment on this topic .

Dear Manish,

What I concluded after my and others’ experiences is that thieves dont come in the dark always. They are not always dressed in masks and armed with lock breakers etc. We can encounter thieves even in broad daylight dressed in finest of clothes with most charming smiles on their faces, so much so that even most intelligent people can fall prey to them.

We all lock our houses when we go out daily, because we dont know when the thieves may come. We all lock our cars when we park them, so as to protect from theft. These “locks” can be bought in the market for some price and applied on the doors.

But there are some other “locks” which can only be acquired by getting knowledge. This cannot be bought from market for some money. And getting this lock is a life long process which entails a lot of effort. This “LOCK” is required for protecting our hard earned money. Or else the charming and well dressed “thieves” shall rob us in broad daylight. This is KALYUG. And thus everyone will rob us if we are not cautious. We can very well say we were ignorant but it is our fault. Not locking a house and expecting there shall be no thieves is not the order of the day in today’s world.

Why dont we educate ourselves against this robbery

Reasons are many- lack of time, lack of access to knowledge, lack of knack of understanding the concepts of money, lack of interest etc. But I think spending some time and taking some effort to save our hard earned money is really required or else money will just slip like sand slips out of our hand.

What I feel strongly

There is no mis-selling, there is only MIS-BUYING. After all its ME who had put the signature on the application form I can blame nobody absolutely nobody for that signature.

Sorry if I sounded too harsh

Time Spent before and after making the decision

Nandish some makes an interesting comment on this, he says – People spend too much energy and time after buying the product , and not at the time of buying it .

If you see your past behavior – You might have spent very less time in buying a product and maximum time worrying and cribbing about the product later . However all you need to do is spend some more time at the time of buying and nothing later. All their life Indian investors take decisions on the basis of trust and relationships. They ignore their financial lives and how they deal with it, but at some point in time, we need to understand that world is changing, our country is changing and the whole dynamics of personal finance are changing. We now, need to take responsibility of what we are doing and make our own decisions.

What do you think about this concept of misbuying or misselling ? How much is it a fault of the buyer and how much of seller ?

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55 replies on this article “Misselling or Misbuying – What’s your case ?”

  1. In this commercial world, all the people are trying to cheat some one in some way, if we note very keenly from the dearer we love, we can notify at any time…But in Businness without mis selling many of the businness may not run…But I strictly support for mis buyers they should be aware and have enough knowledge or some trust worthy by asking some one before buying that.If he is not satisfied with that he can try to avoid…Mis buyers should change Mis sellers…Till Mis buyers are there upto that time Mis sellers also there in this world…

    1. Good to hear you valuable views on this topic !

  2. sunil says:

    Hi Manish,
    Am decided to take home lone from sbi,which is best product like sbi max gain or easy home loan or any other new product with less interest rate.

    Thanks in advance

    1. Good to hear that Sunil !

      1. sunil says:

        hi manish,
        can u suggest me best product like sbi max gain or easy home loan or any other new product with less interest rate in sbi

        1. I dont think there is better alternative beside SBI maxgain

  3. Hmmm. Another thought provoking and well written article. While both the buyer and the seller are responsible for any financial transaction that takes place, I feel MIS-SELLING is a more suitable term for the following reasons :

    1. It is usually the seller who is more desperate to sell his product to the buyer than the buyer is to buy it.
    2. Most buyers are from a non-finance background and so they have to trust the seller/agent who are supposed to be finance specialists.The onus is more on the advisor/agent not to break this trust.
    3. Most of the times it is the agent who has been given huge sales targets from his employer who approaches the investor and pursues him..not the other way round!

    1. Yes .. agree with your points 🙂

  4. ashok says:

    Very good article. When i bought a second hand car, house.. i came to know that i was cheated in some points…the big reason was i bought hurrily and thinking that if i make some delay, they may think that i am a poor fellow.. shit.. finally i was cheated.. I request everyone that please take enought time before deciding to pay..otherwise you are the loser..

  5. Dhawal Sharma says:

    Dear Manish,

    Great article, a topic which is very close to my heart for obvious reasons (saare Agents chor hotain hain – insurance companies/mutual funds ka to dhanda hi logo ko lootna hai – meire gaade pasine ki kamai kha gaye etc.). I agree that MIS-SELLING is an issue but is that all?? There is no fault AT ALL of the buyer?? You have very rightly put it as Mis-selling and Mis-Buying go hand in hand..Taali kabhi bhi ek haath se nahi bajti..

    What i have observed in the actual world, the main causes for these type of transactions and what steps each one of us could take are:

    * There is only 20% of total transactions which are happening through a PROFESSIONAL. Most of the public is happy to buy Insurance/MF through their relatives, neighbours, collegues etc. Common men does not even bother to check about the advisor credentials. First & foremost step which can eliminate this malaise to a great extent is to deal with a FULL-TIME, PROFESSIONAL advisor.
    Stop being a “sentimental fool” to encourage a PART-TIMER, who has just started this business to make some fast bucks..tell me, how many will encourage their relatives who have started the agency of something like CEMENT and buy 10 boris of cement to help him achieve his target quota?? If everyone will say No to him then why/how difficult is it to decline a relative financial advisor..
    * There is an old saying – “A fool will soon be departed of his money.” Majority of us investors/savers are FINANCIAL ILLETRATES and hardly make any efforts to appraise ourselves to just get the basic idea of investments we are about to make. We have all the time to know about the latest score – hero/heroine scandals but no time to just check the terms and conditions of the financial instrument. If we will keep our eyes close, this Mis-selling + Mis-buying will automatically be reduced to a great extent. Remember, even the Great Amitabh Bachchan says “Gyan hi aapko aap ka haq dilata hai” 😉
    * Lets not complicate things and end up with our fingers in more than one pie, and thus tangling ourselves in various instruments without getting into any sort of understanding; and thus Mis-selling + Mis-buying. Simple mantras: secure yourself with TERM PLAN + buy CHILD PLAN ULIP if you kids are less than 3 years old (With time horizon of at least 15 years) + buy MF (ELSS for tax saving and Diversified Equity funds for long term wealth creation) + FDs for short term..And that is it. No need to go for exotic products like PMS etc. and even then you have winners on your hand.
    * Greed is another obstacle which leads us to close our eyes to conventional wisdom. People investing in ponzi schemes promising 25% return in an year or doubling money in 3 years..There is no JAADU KI CHHADI which can do that..Wealth is created over a period of time and not overnight..
    * Stay put. I see a lot of people who says that i have been mis-sold by the advisor as i hardly made any money through MF. Show me any one person whose SIP is running for last 6 to 7 years and he is in loss?? there wont be any..Simply because it takes time to generate extrodinary returns. People in their greed for returns in short-term churn their portfolio and then end up cursing advisor and mf/insurance..Continue with your investment and benefits will follow..
    * last but not the least, and one of the most important factor in my industry; i see a lot many people who have purchased insurance and taken “commission passback” from their advisor, and now when the agent is not responding/servicing them; they say AGENTS are CHOR..Sorry sir, it does not work that way. Once you have taken the remuneration of a service provider, dont expect anything from him and no use cursing him later..as Warren Buffet says – HONESTY is a very expensive virtue. Dont expect it from CHEAP people. So dont deal with cheap people and end up having your fingers burnt..

    1. thanks for sharing your deep thoughts on this issue . I agree with all the points .. most of the people do not want to take responsibility that its their financial life and they are on the driver seat , you cant control how others drive !

    2. Sanjay Bhatt says:

      1> Only FULL-TIME, PROFESSIONAL advisers can not drive the sells required to sustain any ULIP?MF busyness. So fund houses will continue to encourage uncle/aunty sellers or PART TIMERS. Investor has to be cautious, and PROFESSIONAL advisers has to wait for monopoly considering industry is still in nascent stage.

      2> Be a FINANCIAL WIZARD or PAY PROFESSIONAL ADVISORY or LOOSE MONEY -theory can not be advertised as of now in this emerging market.

      3> People saying: (saare Agents chor hotain hain – insurance companies/mutual funds ka to dhanda hi logo ko lootna hai – meire gaade pasine ki kamai kha gaye etc.)
      “saare Agents chor hotain hain ” Impossible, “80% Agents chor hotain hain “- Cant say impossible.

      “insurance companies/mutual funds ka to dhanda hi logo ko lootna hai” -Believers please think again. It was just a bad patch in market.

      4> “Once you have taken the remuneration of a service provider, dont expect anything from him and no use cursing him later.” Who “put a gun on your head and make you” give your commission ? The customer? And what about trailing commissions? If you continue to receive trailing commissions then why you are not supposed to serve your customer even if you give your first commission to him?

      Look industry is already being crippled with bad market performance,don’t complicate this with bad images.You agents need to do your part of being honest.Do it in spite of being not as COSTLY as Mr. Warren Buffet.Always remember “CHEAP people” will drive growth in industry (Your commission/charges and my salary also).Yes I work for industry.

  6. Paresh says:

    I still do not understand the concept of mis buying or mis selling..

    We complain about mutual funds , we complain about insurance plans, we Complain about PMS , We complain about NCDs,We complain about deposits..

    Is it possible to have a product which can offer 18-20% safe / Guaranteed returns with tax benefits as well???

  7. Ram Mohan says:

    HI Manish,

    You’ve touched a nerve here. The problem is both sides and not just at buyer end. For example, since you were a software guy, did your company mis-sell your role or did you mis-buy it? This happens every single day in our IT industry. Companies make all sorts of promises with absolutely no chance of delivering on them. In this case, can you say that the person needs to do thorough research? Not possible

    Similarly a financial advisor is akin to the same. For example, if a doctor says take xyz medicine, will you always go in for a second opinion? Only if the cost is high or it’s a major surgery. Otherwise you believe the doctor is doing things for your good and earning his living. But we all know that there are greedy doctors also who just want to make money

    THe problem seems to be that in the financial industry, either the sellers are just too greedy and dishonest or they’re simply not smart enough to sell the right products, hence they end up fleecing the customer. Otherwise why would a smart guy missell?

    1. Thanks for your views Ram .. I understood your point , makes sense . But in personal finance one always has the ability to atleast do some basic search if not in detail . which will save millions of people .

  8. Srinivas says:

    Good one.

    As money is mine and i am signing the papers, it is easy to say that it is a mis-buy. As the product is by a company, the company/distributor is at fault is the counter argument.

    In ancient society, there were only two things correct or incorrect and the justice used to be served according to that perception. In modern society, there are umpteen number of shades of gray in between correct and incorrect. Thus the issues are becoming more and more complex and are sustaining a whole system(judiciary)

    Thus it is increasingly becoming difficult to point out whether some action is correct or incorrect without analysing various aspects in favour and against the action. In the current context, i feel one has to analyse the following aspects.

    1. Increasing complexity.

    When i buy a cycle, i check with friends and take a knowledgeable decision based on the general satisfaction levels of owners of the product. In this case, the decision is not very complex. I can judge as to how much trouble free service the product is giving. Same is the case with any appliance. One can decide based on service vs price equation.
    The game changes, in case of financial product. There are many variables which can impact the performance and all may not the aware of the nuances, as financial literacy levels are in general poor, even in educated class. A financial product is a multi edged sword. If one is not careful, it can cut from a different side. The problem is it is not very easy to check all sides to make a decision. That is the reason why many take easy path and depend on an expert. However, one does not know who is an expert and depends on any one who is talking about the product as an expert.

    2. Changing aspirations

    In my childhood, my father used to have an advisor. He is also a fellow teacher, and he used to guide his colleagues on financial matters. Incidentally he has an LIC agency. He was dependable and all his colleagues had no issues with him. Here what i want to highlight is that our aspiration level also changed. Many needs best advice, free. Incidentally the same one, is not able to find the difference between selfish / useless/ unwise/good advices.

    3. Marketing gimmicks

    As some one already highlighted, the presentation is well packaged and one will not be able to find issues with any product, unless one gets a rude awakening subsequently. Also, it will be very convenient for the sales person not to highlight inconvenient facts and advise us to see the offer document, knowing fully well that it doesn’t happen. Here many cover their laziness by saying they are taking decision based on good faith.

    4. Greed

    We see a friend of ours getting some (or big) bounty in a decision and immediately try to ape him, without properly evaluating the consequences. This can lead to long term grief. As it is pointed out many times, every situation, rather every one’s situation is different and band aid solutions may not work for all.

    5. General reduction in the idea of hard work, earn, be frugal and create wealth and enjoy

    I feel that we are slowly deviating from the work ethic(doctrine that hardwork pays) and tending towards (unchartered/unknown) shortcuts. When one wants to enjoy the fruits, it is imperative that he works hard to understand the intricacies, work accordingly to gain from the concept. Now we want to enjoy, with the (free) knowledge of others. This may not always work.

    After all these points, is it misselling or mis buying. Only supreme court can decide.

    However, one need not wait for the verdict. One can start by learning about personal finance(and educate family members). Then understand the nuances of wealth creation, make a strategy and work diligently towards the goal with regular course correction, when needed.

    Incidentally it is fun and above all, not that difficult.

    1. Thanks for this excellent comment on this topic 🙂 ..

    2. Reply is very nice, but both Misbuying and Mis-selling are wrong..Do you agree..

  9. Krish says:

    Unfortunately this misbuying concept is also coined by the vested interests. Be it personal, employment or business relations, if the relationship turns sour, the damage is not one sided.

    However incase of investment relationship, the damage is always on one party where investor suffers. Blaming the investors for being naive, lack of knowledge and trusting blindly friends & relatives is a typical of passing the buck culture deep rooted in our society.

    This is not about agents of insurance or MFs or PMS, am sure scores of investors who bought into Sahara, Sathyam, Plantations, Club Memberships, Chit funds, murky real estate and informal lending shall be blamed for being greedy for higher returns is a hypocrisy.

    For me it is always a ‘fraud’ by the corporates on small investors. It is neither a misselling nor a misbuying.

    1. You can always see it like that , but are you saying that a customer does not have to do his due deligence before buying ?

  10. sreejith sivaraman says:

    When I started working a few years ago I wanted to invest in mutual funds. That time I was not aware about how to buy a mutual fund. My friend recommended me to an agent and the agent convinced me that investing in a ULIP is much better than mutual fund. He avoided the word ULIP instead he mentioned a very good scheme. May be he thought if he would have mentioned ULIP I may have searched it in the net. He was not naive , but someone working in the finance domain for many years and has done CA. Later I read a lot about finance and came to know that ULIP is the worst kind of investment in the short term and he sold it to me only to get huge commission. He also told me to stop paying the premium after 3 years. :-). I will name it cheating rather than mis selling. I came to know that he has done the same to many others. You can say we would have done a lot of research before we buy it but when you are young you trust people especially when they seems to be more knowledgeable.

    1. I would say take it as the hard lesson now .. dont trust anyone with your money

  11. Ketan says:

    One question the article did not tackle is “How much knowledge or how much time should be spent before buying?” Also some time back we read this article on jagoinvestor “Perfection – Is it killing your financial life?” https://www.jagoinvestor.com/2012/05/is-looking-for-perfection-killing-your-financial-life.html

    What is the answer to:
    If I have to buy a term insurance/mutual fund etc, how much knowledge gain/time I should spend before signing the dotted line? Will it guarantee that I wont be cheated?

    And to be frank if you spend that much amount reading the offer documents (to know all risks), trying to search for a perfect investment vehicle, you will end up putting money in fixed deposits only 🙂

    Ketan

    1. I would say 80% is good … do 80% research and then take action .. leave the 20% part

  12. Hi Manish/Nandish,

    Great article. Super like.

    There’s a simple test, to find out whether your adviser is cheating you.
    Simply ask what are the negatives or conditions, of the product, he is recommending.
    A good adviser will always take the pain to elaborately explain you the negatives of the product, in detail.

    Regards,

    Mahavir

  13. Vishal says:

    ‘Free look period’ for the policy saved me. I thoroughly read the policy document the same day and realized that all the selling guy explained doesn’t hold true!
    As the policy has a 15-day ‘Free look period’, I returned the policy back. I received the amount back in 5 working days. Though few documentation(etc.) charges were cut, they were minimal 🙂

    1. Good to hear that Vishal ! .. I should say congratulations .. reading the policy document saved you !

  14. Joel says:

    Dear Manish,

    Jagoinvestor : “Can anyone come to you and put a gun on your head and make you buy? If that happens, I think anyone is bound to agree that it was mis-selling.”

    CM: “Pointing a gun is mugging not misselling”

    Manish ,I totally agree with CM.

    Regards
    Joel

    1. Yea .. I said that for people who say – “I was forced to buy” ..

  15. Monika says:

    Hi Manish,

    Though there is surly miss selling where people are trying to make their own good at the cost of others. The reason for this could be absence of long term strategy of organizations and also short term money making schemes of sellers.

    But it is a reality that there is lot of miss buying. Clients buy without thinking or to please the seller who could be known to them in some way. And later they curse the organizations of having wrong practices.

    If only clients are able to spend some time before taking any decision or buying on hearsay… This situation will not improve.

    We do lot of bargaining and search if we have to buy a dress…. What about more serious and important issues of life… Where stakes r higher… There we want someone else to take the lead…. No one can understand a client’s requirement better than the client himself !

    If I am not in for my own good, why would others be ??

    Miss-selling and miss-buying go together … Hand in hand…

    If one would improve the other would too, automatically, since they make each other complete… No selling without buying and vice versa.

    Once again like any consumer awareness program here is a need of one more – Jaago grahak jaago…

    1. Yes .. agree with your thoughts .. the companies need to improve their agents work force quality and education and in addition a client also has to build their long term strategy !

      1. Monika says:

        It is definitely about training. And when it comes to training neither the advisor is willing to make and effort nor the organisation. I wish IRDA would make a mandate and audit it too where an advisor is not allowed to sell till he completes training in organisation. It is the most negatively use department where people r thrown at trainers…advisors who r reluctant to learn and managers who would rather have them in field again miss-selling. It is only the short term gain everyone has taken too. Customer want returns at th shortest possible period and so does the seller. Some sort of Financial Basics needs to be taught to customers too so that they take informed decision.

        1. I am not sure how feasible it will be to check that at IRDA level !

  16. Jagbir says:

    You touched very good topic and explained it very well. I want to add one more word here.. “Mis-holding”, here a person even after knowing that he has bought a crappy product, reluctant to surrender/cancel it and intended to hold until the money invested came back, in essence, increasing his losses with big opportunity cost. I see many people in this category. They need to be told that its better to kick out a bad product at earliest in most of the situations and put whatever left in good instrument. Of course, there’s are sometimes situations where product is just about to mature/unlocked and you are expecting some appreciation but these are very few cases I guess.

    1. Sunil Naik says:

      Dear Jagbir,

      What you said is correct. It is better to kick out bad product at earliest. This thing is applicable to shares also. If shares is going for too much in loss, better to sell then wait it will go up. I made lot of losses in shares and hence developed by own share portfolio software called as “Control Your Shares”.

  17. Abhijit says:

    There is standard line written in a very small letters on number of financial products or in the advertisements etc & that tells us a lot……

    “READ THE OFFER DOCUMENT CAREFULLY BEFORE INVESTING, INVESTMENTS ARE SUBJECT TO MARKET RISKD”

    We need to spend considerable amount of time before thinking of any investment after all it is out hard earned money.

    1. Apart from market risk , there is “mis-selling” risk too

  18. CM says:

    Nice writeup. Why did you not write this 6 years ago? 🙂 (just kidding).. Misselling or Misbuying – go hand in hand. The seller has absolutely no ethics or knowledge of what he is selling and the buyer (me, that is) is a dork regarding that product or is coerced in some way.. Pointing a gun is mugging not misselling

    Even the best rated mutual funds will get you into the negative if you are not razor focussed on what those chaps are doing with your money. I now have a halo around my head after some misadventures..

    My opinion is, even the best experts are humbled when it comes to equities.. at best, they are good with catchphrases and ever enthusiastic to promote investments in the equity market in some form or the other. Maybe, they get some kickbacks..

    (typing with burnt fingers and with a promise never to try an investment which cannot commit anything in return)

    1. So what is the final point you are making , who is to blame for whatever happens , seller or buying and how much ?

  19. Paresh says:

    Please don’t misunderstood my comment.
    As far I believe no product is a bad product.I am not related to any insurance company,but I think it makes sense in investing through ULIPs if your time horizon is more than 15 years…as well saving through endowment plans if you are sure that it will not conflict your other big investment decisions in future.
    I have currently two endowment insurance policies…To find out something positive I always call them as Forced Saving Accounts than insurance policies..Fear of policy lapsation motivate me to remain consistent with my savings…I miss this force in other financial instruments….

    1. Thats a good motivation 🙂 . Why dont you do a RD then or a PPF investments ?

  20. (fooled) Investor says:

    Hi,

    I feel that between the two, ‘misselling’ is a bigger disease. Let me give you my own example. You decide if it was ‘misselling’ or ‘misbuying’.

    I strongly believe in ‘Equity’ investment and have the temprament to take on the volatility as well as crash. But I am not a trader. I am a Long Term Investor with a horizon of 5+ years, to say the least. But it is still difficult to do a research on my own and choose and pick shares. So, just like an Industrialist hires the services of a Professional, in 2005 November, I decided to go for a PMS of some reputed companies. I asked around and was told that ASK Investment Managers were supposed to be one of the biggest. Sales Executive came and showed me some charts with good returns. They had various PMS schemes and I chose ‘Growth’ scheme where there would be more of a buy and hold and less of churning or momentum trading. I was told that the Fund Manager was ‘Bharat Shah’ the ace ex-fund manager of Birla Sunlife Advantage Fund. So, finally I decided to sign up. Please note, this was after all due dilligence that I could do at my level. This was neither out of greed nor a quick buck. The investment was made with them with the understanding that my money would multiply over a period of time with the expertise of a Professional (so-called, as I later realised).

    The readers will be surprised to know that this was one of my worst experiences of PMS investments. The shares were being bought and sold within a span of few months or weeks. The ace fund manager accepts that many of the buys were mis-buys and many of the sells were mis-sells. There has been no withdrawal of a single rupee since then, yet the return as of 31st March 2012 is as DISMAL as a meagre 7.07% CAGR (since 30th Nov 2005) against their own Benchmark (S&P CNX NIFTY) returns of 11.52% CAGR. I would have been much better off investing in some good Mutual Fund Schemes (having same Benchmark) such as ICICI Prudential Dynamic which has given 17.36% CAGR OR ICICI Prudential Top 100 has given 13.60% CAGR. In both cases it is almost double or more than double return than ASK’s PMS Scheme.

    I am sure readers will agree that investing in a PMS scheme is not a ‘misbuying’. It is like appointing an (supposedly as it later turned out to be) informed, expert & professional person of that field in charge of your money. And more over it was not from a fly by night kind of a broker.

    Now is this misselling or misbuying ?

    1. Jagbir says:

      Hi (fooled) Investor, Its all about our own interpretation of facts whether to classify this as miss-selling or miss-buying but still my thought is that if you ask from a barber whether you need a hair-cut or not.. you guess his answer, right? So believing whatever salesman showing you without verifying that independently over internet, company reports, through friends/colleagues etc. essentially put you in miss-buying. I never believe any sales agent, not because he is a good or bad person but because he is just a inter-mediator showing you presentations created by sophisticated sales gurus. Most of the times, sales person himself don’t know exactly what he is selling or whether the product is fit for person sitting next to him.

      1. (fooled) Investor says:

        Hi Jagbir,

        Thanks for your comments. But I am afraid you are not right or you have not read it properly. I mentioned that I did due dilligence at my level. Unfortunately, the fund manager did not adhere to the ‘Growth’ mandate and also did not choose stocks in the best of my interest. And that amounts to deviating from the mandate promised, which amounts to cheating. Not only that. Initially the R.M. assigned remained in touch with me ONLY to persuade me to top up. When I refused, no R.M. ever got in touch with me nor kept me informed of the status of my money. Even after complaining to the fund manager and he promising to correct it, no R.M. ever contacted me or kept in touch. So it turned out to be a bad investment with equally bad service. So, readers.. BEWARE of ASK.

    2. sandhu says:

      all the hardwork put in only adds to our satisfaction or may be to dissatisfaction depending upon how we take it.

      ‘ KISMAT SE JIADA or WAQAT SE PAHLE KUCHH NHI MILTA ‘

    3. So you thought that PMS is better than mutual funds?

      1. (fooled) Investor says:

        Hi,

        I am assuming that this comment from you was for me. No, I am not saying that PMS is better than MF. I already had my fingers in Equity-Direct, Equity-MF and thus wanted to try out other product. Specially PMS because the assumption was that a Professional with limited corpus and clients will be more focussed. Also, unlike in an MF where there are daily inflow and outflow of varied amounts from Rs 1000 to even lakhs. This makes it difficult for the fund manager to deploy funds and has to keep liquid funds too for redemptions. Thus the returns can be lower than a PMS where the corpus is smaller, inflow and outflow are not so freuquent, so the deployment of funds can be made for longer duration. Also, I had gone for Non-Pool a/c where it is not like MFs where every purchase or sale is pro-rata of the pooled corpus.

        Anyways, it surely came as a big letdown that such a big name in PMS also did not generate decent returns.

        1. PMS are well know prodcuts to just churn the portfolio and generate the returns for themselves . Only handful of PMS are respected , but again you always have the risk of loosing a lot just for the fact that its a equity trading activity done by a human ! ..

          Read these

          http://shabbir.in/share-pms-experience/
          http://shabbir.in/pms-review/

  21. sandhu says:

    very nice description and thought provoking (many people may have ideas but very few can put them in words so that others start thinking, u r the one who does it).

    any way i think about this, this way,

    if a relative or friend or aquintance is the agent selling, then it is more of misselling

    if one buyes from a stranger it is more of misbuying

    but above all the knowledge of the person about the product he is selling is most important, because that gives rise to intentions which effect faith and integrity

    any way nothing is absolute, it is only which shade is more.

    my experience,

    one of my cousines became an insurance agent. my father’s order to the extended family was, ” kaka jee da honsla vadhana hai (every body to boost moral of the youngster)” [ because cousine was at that time not able to find a decent job nor was interested in looking after land property. ]

    so every body obliged.

    i bought three ULIPS for self, wife and daughter , paid the first instalment and then never looked at them, knowing that they are useless.

    few in the family are still paying the premiums.

    he left the company after that and is happily setteled in a far away place.

    but inspite of he and his wife working in another insurance company (now as mid level executive in a different capacity), i am surprised he still does not understand these schemes.

    so was this a case of misselling or misbuying. i donot know. i think few were missold and few misbought. the actual culprit the companies devising such products are scotfree.

    ( three cheers to free economy and KULYUG)

    1. Jassi says:

      Very nicely quoted, Sandhu jee.
      Hahahaaha, quite an interesting line used by Punjabis (elders) quite often, to encourage any kind of selling 🙂
      ” kaka jee da honsla vadhana hai” :):)

      I also agree, with relatives coming in as agents, its just very tricky to say NO.
      In all conversations about that relative, you will always be reminded :):)
      ( – Yaad hai na, tussi aiwein kitta see – remember, you did like this to him/her )

      Rgds,
      Jassi

    2. So from your comment, the way I look at it is , if you are buying from someone known , you will call it as misselling because there was a high trust factor ! ..right

      1. sandhu says:

        right as well as wrong.

        means generally it is ‘mis – inbetween’ or ‘miss or mrs – something else’

        it is not only question of a known or unknown person only, but it also has to factor in knowledge (the true knowledge) of the person selling it (this will take care of the true integrity of the seller and faith a buyer put in , in the seller) and the awairness of the person buying it (one should not blame others for his own actions; e.g. some one tells me route to delhi and i meet with an accident on the way and i blame my guide for that, how right it will be)

        any way your site or blog whatever it is called, is excellent. i wish i had got something like this long time back.

        i am trying to read each of your old articles, still in the process.

        i think although information and also the misinformation is available all around
        but this site gives most comprehensive and correct information in very simplistic easy to understand way.

        keep it up

        thanks and regards

        1. Thanks Sandhu for appreciation

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