When I started off fresh from business school, I was extremely anxious and wondered at the level of knowledge I would need to be able to converse with the market gurus. But soon this impression faded….there were not too many who challenged my grey cells.
Meetings with the retail bankers hovered around parties largely. If we needed investments, all we were expected to do was to provide the POP and negotiate the rate of a per application payout. We were educated on the proper use and effectiveness of vouchers. And once the deal was struck, the job of the Relationship Manager (RM) got elevated to a logistics and document manager, i.e. the RM needed to be at the bank branch at every beck and call to be ready to fill in the forms.
In one bank meeting, I was asked about what more we can do for the banker. It did not matter whether our funds were good or not. It was about ‘WIITFM’ - What is in it for me? Sometimes on joint calls, I felt like a partner in crime, since I had to stay mum during the financial murder of selling a high-cost insurance policy, even if the client’s needs were otherwise.
I then graduated to classy banks and wealth management firms. People here were suave, spoke fluent English and flaunted branded ware. There was a lot of emphasis and eloquent conversation on client needs, Indian and world economics, risk measures taken at all levels and the need to be client centric. I was floored by the aura created. This was the place I was looking for. This is what it meant being true to the investor.
But soon the honeymoon was over. Finally, what got sold were structured products, leveraged structures and high risk debt. Money lent to businesses with poor credit and high coupons packaged as an attractive product. We needed to know acronyms and jargons like CPPI model with 125 per cent upside participation etc. The problem lay in the fact that most who sold and most who invested did not quite understand the product.
These were the bigger fish. They were high cost resources and ran higher revenue targets to get their annual bonuses. This makes me remember John Bogle’s book, “Enough” on the sub prime crisis, where a hedge fund manager addresses his team by saying that he had good and bad news. The latter was that most of their clients lost most of their monies. The good news was that none of it was their own.
The sheen on this segment too wore off and I wanted to try out other channels. I thought that the Independent Financial Advisors (IFAs) would be the best since they were the ones who were working for themselves. There would be no revenue targets, no bosses to scream and no peer pressure. This segment logically would thrive only if their clients prospered. I was then mapped to a few individuals.
Here the learnings were brand new...….
Distributors in lieu of offsites abroad qualify for contests by diverting funds to such schemes. Few months later, the money is moved to another asset management company (AMC) for yet another contest. The AMC RM is happy and is crowned as a star performer, the distributor got a kick about getting yet another stamp on his passport and the AMC recovered some money as exit load. Nobody lost, other than the clients.
I saw messed up portfolios, active churns, over diversification and senseless effort to time the market. Few spoke and even fewer practiced simple concepts of asset allocation and financial planning. In the garb of portfolio monitoring and rebalancing, most distributors were churning investments regularly.
After almost a couple of years in the company, sometimes I wondered what I specialised in. Was I supposed to be a punching bag, to be listening to all the problems bestowed on the distributor by the Regulator or was I a party and of –site event manager, wherein everything from rooming to Jain food requirements needed to be taken care of. Was I supposed to be a silent spectator when I saw clients with messy portfolios? Was I a specialist in organising trips abroad? Was I supposed to know the brands distributors smoke or drink, the vegetables that qualify for Jain food, the movies they would like to see with their families? Maybe I am to continuously think of innovative ways to increase engagement levels (read wrapped incentives, off-sites etc)…..Or am I supposed to know the best investment products?
As of now I am rather confused. But I wonder whether it would be any better in other professions.