How to tackle the salesman at your door Unable to open Orkut, facebook or any other site in your office - try Iwebslog - http://community.iwebslog.com
Create your own Stories, Pages, Forums, Groups, Blogs, Interact with Friends, send messages, Email them. RSS feeds and Content syndication. Thats all at one place. Have a good day - http://iwebslog.com A decade ago, for most middle-class individuals, personal finance decisions were relatively simpler as their investment options were limited to postal saving schemes and fixed deposits. With incomes rising, investment choices have grown and with choice comes complexity. In the world of structured products with core complex strategies, financial intermediaries have come to play a big role. With the financial services industry moving to the 'commission-based' distribution model, most individuals are likely to come across an 'agent' who tries to sell a product. Here are some tips on how to deal with them: Ask stupid questions There is nothing wrong or inappropriate in asking questions that sound stupid. After all, it is your money. If you do not understand a product, ask for details. Instead of presuming things, seek clarifications. Most products come with benefit illustrations. Sift through them for better understanding, along with what is on offer from the competition. The agent should be helping you out in understanding these. No obligation business When you shop for clothes, a television set or even a car, you may choose to window-shop or even visit some showrooms or malls. You may try out clothes and walk out without buying any. There is no obligation on you to buy one. Investments are no different. You are not obliged to buy a loan, life insurance policy or a mutual fund even if you make extensive inquiries. Unable to open Orkut, facebook or any other site in your office - try Iwebslog - http://community.iwebslog.com Create your own Stories, Pages, Forums, Groups, Blogs, Interact with Friends, send messages, Email them. RSS feeds and Content syndication. Thats all at one place. Have a good day - http://iwebslog.com Performance The performance of the financial intermediary should be analysed using two parameters. First, what is the level of deliverables? For instance, the services of two stock brokers will be different: One may offer you 'online trading' involving e-funds transfer and digital contract notes with no human interface and another may offer you human interface and contract notes on 'paper'. Of course, the costs associated also differ. Second factor will be your needs. A stock broker that offers an excellent online trading platform for buying foreign securities will be of no use to an individual who restricts his investments to domestic equities. You will be better off if you keep these factors in mind while signing an intermediary and dealing with it. Ask about his income Ask the intermediaries how they are compensated. There is nothing wrong about it. Most professional bodies and regulators have made it mandatory to disclose the compensation received by the intermediaries. Do not choose or avoid a product because the intermediary is making more or less money out of it. Rather, knowing about the commissions may help you understand the 'sales pitch'. Offer the advisors to give you an advice for a 'fee' than buying any product from them. The advice may not remain the same, if you tell the intermediary that you are not going to buy anything from him. Grievances Grievances need to be heard. Most good financial service providers provide you with details of the authorities to contact if you have a grievance. Instead of fighting with the 'call centre' executive or 'helplines', write to the 'nodal authorities' appointed by the service providers before approaching regulators for redressal. Do things yourselves With the advent of technology, it is easy to buy financial products directly from companies. This saves time and cost, after you break the initial wall of 'system issues'. Forms are no more difficult as they used to be and an attempt to fill it on your own will prove this. Still, if you want hand-holding, go for an advice for fee from an expert and hand over the 'execution' to a 'distributor'. Do not pay the expert advisors for execution as incremental costs here are generally higher than what is charged by an average distributor in the form of 'commission'. But you do have the choice of getting everything done by one person if that gives you peace of mind. Unable to open Orkut, facebook or any other site in your office - try Iwebslog - http://community.iwebslog.com Create your own Stories, Pages, Forums, Groups, Blogs, Interact with Friends, send messages, Email them. RSS feeds and Content syndication. Thats all at one place. 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