The Crafty Investment Banker
Hi guys, how are you doing? I hope the lockdown hasn’t been too tough on you and that you’re safe and well! I pray that COVID-19 is curbed and no more lives are lost. The Spanish flu took over 50 million lives in the early 20th century. With modern medicine, understanding of microbes, and global connectivity, it will be a victory to keep this pandemic in check, with the least possible loss of lives.
Today I would like to take this opportunity to warn you about something just as lethal as the dreaded virus -
THE INVESTMENT BANKER/ ADVISOR
I would like to shed some light on a personal experience I have dealt with due to the unjust system of banking today!
I’m sharing this with you on the basis of experience as well as a survey of friends and relatives. We aim to share our story and create awareness so as to help people who could potentially have a similar unsettling experience in the near future. We would truly appreciate it if you took the time to read this till the very end and help support us.
There is an instrument of investment called MUTUAL FUNDS.
Designated bankers keep a track of your account and when they realize that you may be a potential client, they contact you, visit you,re-visit you, ring you, and convince you that the only way to have your money match inflation and save tax is through a mutual fund. They have numerous categories and sub-categories such as :- large-cap, mid-cap, small-cap, arbitrage, liquid, and debt. The list is endless. They will pitch for a particular investment or an insurance policy with missionary zeal. You will never be left in peace until you fall victim to the mutual fund and/or an insurance scheme that they are pitching. Documents are placed before you for a signature that usually has 3 pages of a very fine print. A magnifying glass and a corporate lawyer would be necessary to read the text and the legality behind those documents. They are mandated by the regulatory authorities which are SEBI to update clients quarterly and you will not see the banker nor hear from them until of course your account has money. Again, the cycle of persuasion and pestering repeats.
Allow me to share MY EXPERIENCE-
My mother is a doctor at a community based busy suburban hospital. She’s an OBGYN. Her hours of work are long and tiring. The night calls are numerous and the risk is enormous especially when a patient is unwell or unstable. I know of my mother being there physically with the patient for 5- 6 hours and having her team monitor the patient around the clock during an emergency. She has never hesitated in terms of carrying out a delivery or surgery on a patient with Hepatitis, HIV, or even Covid-19.
HER EXPLANATION IS - I SIGNED UP FOR THIS AND EVERY MOTHER AND BABY IS VALUABLE.
My grouse with these bankers is that they’re the ones who are tracking the market. When there is a significant slide or shift, why are they not obliged to communicate effectively? When the tsunami has already hit, they announce that your portfolio is down in the dumps!
INVESTMENT BANKERS TRULY MAKE YOU SIGN YOUR MONEY AWAY!
I do know about the financial world to a certain extent as I was part of an internship at a stockbroking firm/ financial company.
I was the one who pointed out to my mother, that they had sold her a closed-ended fund of 3 years without informing her that her money remained locked in. The clause of the “Market Risks” is muttered so fast on the advertising portals and in the print of their paperwork. If you suggest that you are comfortable with a safer option like a Fixed Deposit (FDs), they will talk over you about your disadvantaged position of a higher tax on this asset and how the mutual fund is far in advantage with a lower rate of taxation.
These bankers never fail to pay themselves commissions, trail commissions, ESOPs, and loans at rock bottom interest rates. Those at the top have perks of the rich and famous. The chief of the bank in which my mother invests in takes a group of his family and friends for an all-paid for a vacation at an exotic location annually. Let us not forget the global economic downslide of 2008 due to a mismanaged banking system in the USA. Closer to home banks have let us down. They are in collusion with economic rascals like Vijay Mallya,Nirav Modi, and the likes. These men have done a disservice to their employees, organization, and country as a whole. A cartel between the bankers, politicians, and scoundrels allows for huge unsecured loans and a slippery exit out of the country with their loot when called out.
I have simple suggestions to make these INVESTMENT BANKERS have them more accountable so that we clients are not made
INVISIBLE and VOICELESS:
ALERT LINE -
A weekly updated portfolio and a more urgent communication by a call and email to update clients when markets are showing a downward slide over 5-6%.
ACTION LINE -
If there is a slide in the market in a very short period of time, say a week, of 8% or more, the client must be updated immediately and given the choice to stay invested or move to a more secure asset such as a term deposit or the savings account.
DECLARATION OF INTEREST -
All kinds of commissions linked to the asset must be declared in the document and communicated to the client clearly.
CONCLUSION:
Let us be united in a client-based forum to make these BANKERS answerable, accountable, and open to an inquiry when necessary. We cannot be signing away our money with the bankers taking no share of responsibility. They too must be required to sign a document holding them to standards of accountability and financial repercussions.
And so my mother and I request you to help us bring this unfortunate incident we’ve experienced to light. We wish to make people aware of the possible negative outcomes of choices like ours and to be cautious while making such decisions. All support is truly appreciated.
WE SINCERELY HOPE TO MAKE A CHANGE! 😊
- Maya Sodder.