Some days ago, the CEO of a leading financial services company excitedly stressed about how customer-centric his company was. The statement made me wonder, what was there to get so excited when the very business that he runs solely depends on customers— without whom, there are no takers for the product and services offered by this company. Curiosity got better of me and I asked what these new customer-centric efforts were. I was palpably embarrassed when I was told that the exhilaration was over a dedicated mechanism that was created to reach out to customers about product performance.

Unlike consumer goods, like the marvellous gadgets that Apple designs where user experience and convenience rests at the centre, financial services companies rarely think of consumer benefits. Yes, they will take umbrage under regulatory issues and compliance issues. It is for these very reasons that very rarely do any of them create a close relationship with their retail customers and understand little of their actual needs. Very conveniently complaints and disputes are directed towards an office which may not be easily accessible. In case it is, the procedure to get a hearing could challenge your wits.

Simplification = end of business

I sense, the moment product simplicity is introduced into financial services, it would threaten their very existence. Take for instance the most sold financial instrument—life insurance. Every working Indian needs a term plan and no more. Yet, chances are you will not get to hear of this from an agent or the insurance company as much as you would about a plan which will earn fabulous returns or double your money in so many years. In the same vein if you go to a bank branch to get a banking related transaction, chances are a relationship manager will start pushing a plan to you that you may not need.

It is no different with mutual funds—the talk is more on why you should invest in them, the convenience and the likes than it is about possible advantages, considering one of the most dependable rules of investing is that stocks as a whole revert to their mean price-earnings ratio over time. So, there is no point pushing for investing in equities or equity-oriented funds just because the markets are low or just because foreign investors think India offers a great investment potential.

I can go on, but you get the drift. A frequently-referred-to financial plan is the one that was prepared by Scott Adams, the creator of Dilbert. It is spread over nine points and gets over in less than 100 words. I suggest you look it up the internet. A definite way to protect your wealth is to read us frequently, and of course question everything that a financial intermediary tells you at the time of selling, till you fully understand it. And never give up just because he is using jargon, you can always refer to us when in doubt about jargon—that is one thing that we try to stay away from.

olmdesk@outlookindia.com