Confessions of a Wealth Manager

Finest Blog Winner - Second Weekly Pick of October 2011

I have been thinking to write this from a long time…4 years to be precise.


It started in June 2006; my life was going on very smoothly. I had got engaged to the love of my life and marriage was on its way. My life was going to change and yes it did change. I and my other colleagues were called by my branch manager for a discussion about some communication from my head office. It was a shocker for all of us. The company had decided to close down the vertical I was working for. This was the last thing I expected.


I started my job search immediately. One of my friends referred me for an opening in the bank where he was working. The opening was for the position of a “Financial Planning Manager” in the wealth management department. I went through 5 rounds of interview. With ZERO knowledge about financial products and industry, it was not a cake walk for me but I managed to sell myself for this position and got the job offer.


July 2006 was a new start for my career as a financial planner in one of the best MNC bank in the world. I was very excited on my joining day. I was even more excited when I came to know that the department I was going to be a part of, had over achieved its half yearly target. The figure was 200 Crores. The top 10 financial planners would leave for Jim Corbett national park for a cool 7 days all paid trip. Man, this was a dream come true for me and for my parents getting a job in a bank was like arriving in life.


That night I came back home thinking I have got the best job in the world. A brand name to work for, alluring designation, good pay package and a clearly visible bright future.


I was inducted well into the company. Week long trainings in five star hotels added to my excitement. I was on job after a month of hectic and informative training sessions.


I was given a long list of clients to be contacted as their relationship manager. Most of them had enough and more money in their account. I started calling them one by one and started explaining them about financial planning and how it will be useful for their future. This telecalling activity is supposed to be my daily routine and I was required to call at least 50 new clients every day. Now you know why you receive so many calls from banks for selling their products.



I got my first appointment with a young software engineer. He had started working about a year ago and wanted to know about various options where he can invest to maximize his returns. I took him through the financial planning process and told him what goal he should keep for himself. The goal was comfortable retirement by age 50. I did some quick calculations and told him how much he would need at age 50 to retire comfortably. Next, I asked him to fill a questionnaire which will tell his risk taking appetite and the investments he should chose should be as per his risk appetite.


Now, I had to suggest him the products where he should invest. I had two products to sell, mutual fund and Unit Linked Insurance Plan. I suggested him investment in mutual fund (Systematic Investment Plan - SIP) and quickly finished the paper work and went back to office. I told my manager about the meeting and my first deal INR 10,000 SIP. He was not very pleased with what I had suggested the client. I was confused.


Next day I went for another meeting and took the client through the same process and suggested mutual fund SIP and finished the paperwork. In one week, I was standing at good amount of investment I had got from the clients I met. I was happy.


Friday was our weekly review day and I was confident about what I had achieved in one week. So, here was a team of 20 odd wealth managers ready to tell their seniors about what they had achieved in the last week. The seniors would refer to the hand written data on a big white board. The review started and I started to feel the heat listening to others’ review. Then came my chance and I started telling what did I get for the bank. They seemed ok with my work as far as mutual fund sales were concerned. Then came the next question---What about ULIP? How many policies did you login? What is the premium? I said, “None”. They looked at my manager and asked him to speak to me after the review was over.



I met my manager after the review. Before this I spoke to my colleagues and had some idea about what he was going to tell me. He started by asking me how I am feeling in the new job and how were the meetings etc. Then, he asked me if I was aware of the commission which bank gets on ULIP and Mutual Funds. I nodded my head in yes. The commission rate on mutual fund was 2.25% on investment value and for ULIP it was 50% of the first year premium. I was suggesting only mutual funds to my clients and did not suggest ULIP. I was asked by my manager to focus more on ULIP.
I was trained on the ULIP I was supposed to sell and the first year charges were 50% of the premium value. So, If I sell a ULIP of INR 1,00,000 as first year premium 50% of the amount i.e. INR 50,000 will be deducted as charges and only 50,000 will be invested. For me it was like losing your hard earned money and the compounding on the same. I wasn’t very confident about selling this ULIP.


However, I had a job and the bank was paying me a good salary. I was going to be married in some months down the line and did not want to take any chances with my career. I started selling a combination of ULIPs and mutual funds. I had a tough time selling ULIPs as I always very clearly told my clients about the charges of the ULIP and anybody with minimal brains would never buy this ULIP after knowing the charges.


Every week I was being grilled in the review by my higher ups on the ULIP numbers. I had no answer and just kept telling them that I have a good pipeline and will login some good policies in coming days. Actually, I was lying to them and to myself. It was getting tougher for me week by week.



I closed some policies in the mean time but they were not good enough. I had a target of 5 lakh premium every month and was achieving not more than 1.5 lakh and those too very small policies of 25k-30k. My colleagues were over achieving their targets and selling policies of 1-2 lakh. I was under pressure. Every Thursday, I used to go to bed thinking that I will resign tomorrow (my review day was every Friday).
I did not want to lose my job and I decided that I will not tell my clients about the charges of the ULIP. I started to do something which I still regret, selling ULIP the wrong way. It was difficult and very apparent from my body language when I spoke to my clients that I was hiding something. I got success soon and closed my first big policy of INR 1.2 Lakh. I was more confident now and selling big policies. I started over achieving my targets and the appreciation I got from my higher ups further boosted by confidence.


I made good money in incentives every month. But, slowly I started becoming uncomfortable about ULIPs again. I was selling big policies and I started playing not only with my clients’ money but also their trust in me. I was trusted to provide good advice and I was actually cheating them to achieve my targets and get appreciations from my managers.


With just one month for my marriage I was at the worst stage in my life. I had to make a choice between continuing in the same job or looking out for another job. I made my mind and started my job search again and the bad news was that I was getting offers for a similar profile. I was stuck.


The time had come and I went for my wedding. I came back in the month of March and resigned from my job immediately. I never thought I would take this decision so abruptly. The reason was my 2 week long leave for my wedding where I got enough and more time to think and take decision. I also discussed this with my wife and she supported my decision.


I got in touch with my ex-boss and discussed with him about what I was going through. He made an offer to join him in his new venture which I happily accepted (with a pay cut though). It was a new start for me.
After 20 days my father passed away and I had to rush back to my home town. After the rituals were over, as usual we started to check the financial documents of my father. I could find two insurance policies, one from LIC and another from HDFC Life insurance which was taken 2 years back. LIC was ok but the HDFC policy was a pension plan sold to my father at the age of 56 and this was sold to him by his very close friend. Anyways, the policy was a Unit Linked Pension Plan and the premium was 10,000 per year. I knew that the minimum sum assured has to be 10 times of the cover so; I was expecting 1 Lakh for my mother from that policy.
I got a shocker of my life to find that the life cover in this case was INR 1000 only. I called up the guy who had sold this policy and he said that as my father’s health was not good and to avoid any medical checkup (which could result in the insurance company declining the policy) he had opted for a life cover of INR 1000 only. I was very furious but I couldn’t do anything. I asked him to process the death claim and got back just INR 17,000 for the INR 20,000 my father paid (thanks to the charges).


Today, as I write this, I still feel bad about what I did to my clients’ money. I cannot undo what is already done but I try my best to educate people about financial planning for their and their kids’ bright future.
Before finishing this post, I want to make a point about how we deal with our money. We take advice mostly from our friends or relatives or representatives from banks. We are not ready to pay any money for good genuine advice and in that process we lose lakhs of rupees over a period of time.


You don’t go to your friend or relative when you need legal or medical advice. You go to a lawyer or doctor..Right. So, if your money is important to you…you should go to a financial planner and no one else.


It’s time you decide how you want to deal with your money.

 

Thank you Akila, Sree and Lauren...I feel so relaxed after writing this. I am doing my bit to make things better and I feel great doing it.

 

Hi Shanti,

Thanks for your comment..

I cannot change the world but am doing my bit...big or small doesn't matter...

Shaishav

 

Hi,

I am touched by your comment...Thanks.

Once Mahatma Gandhi said, "Be the change you want to see in the world". Just trying to follow that...

If you want more people to be aware about this...you can share this on facebook...

Many Thanks,

Shaishav