I had a very interesting call from a tele-caller recently. The conversation went like this:
He asked me, “Sir, do you trade in stocks?”
I replied, “No, I do not trade in stocks.”
He asked, “Will you be interested?”
I replied, “No, I do not trade in stocks.” (On both occasions, I had emphasized on the word “trade”.)
The guy was not one to take the clue. He, however, was also not one to give up. Since he understood my answers as someone who may not like stocks, he probably assumed I was risk-averse. So, he followed up with another question.
He asked, “Sir, we also are in insurance sector. Do you invest in insurance?”
I coolly replied, “I do not invest in insurance.”
I understood that he has not got the message. So I repeated, “I do not trade in stocks and do not invest in insurance.”
Incidentally, he still did not get the message.
It is important for most to know what to do with what products or services. In both the above cases, I do use the products offered, but for completely different reasons. I invest in stocks and buy insurance as protection against certain risks.
Unfortunately, most of the sellers – they come in various different names – tele-callers, relationship managers, advisors, distributors – do not do justice to their duty, which is to help customers satisfy their needs. In stead, in most cases, these sellers work to satisfy their own needs.
Investing in stocks is a good idea as it can help an investor create wealth for oneself. But trading in stocks is hazardous for a novice, a common person, a layperson. But it can make lots of money for the broker.
Same is the case with investment products from insurance companies. In most cases, when an insurance product is pushed by a seller, it invariably serves the needs of the seller (who gets high commissions) and not the buyer (who gets inappropriate / lousy product).
It is important for a buyer to know what one is getting into. The words “caveat emptor” (meaning “buyer-beware”) should be remembered at all times. In both the cases, I could have shown interest in the proposition had the seller told me the benefits that I was looking for. Serving the customer needs should be the main motto of the organizations. Many chief executives claim to have “customer first” as their primary objective or core philosophy. But the behaviour of the people on the front lines is exactly opposite. To a great extent the fault lies with the training, orientation and incentivisation of the sales teams.
This means that when someone mentions that they only do “need-based” selling; it is a good idea to ask “whose need?”
“Buyer-beware” is always a good idea. If I am signing the cheque and the application form, I must take the responsibility of my decision and action. It doesn’t help to pass on the blame on someone else, be it the advisor in-between, the service (or product) provider or the regulator. The loss or pain will not be shared by anyone. In that case, it would help to be careful.
This does not suggest that all the sellers are bad. I cannot generalize like this. I have been a salesperson all my life. It would be unfair for me to say that ‘sales’ is always a bad and unethical job, but there are always some bad sheep in the flock. The buyer has the responsibility to safeguard one’s own interests.
Happy investing and insuring!
Sunday, November 15, 2009
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The person who wrote this blog is very knowledgalble person in Finacial Planning Field.ReplyDelete
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Great Start Amit,ReplyDelete
Good one Amit Sir......... Financial Literacy is the solution for these problems.ReplyDelete
It happens with every individuals. Training seems must for tele callers especialy life insurance professionals.ReplyDelete
I couldn't agree with you more, as you wrote, one cannot 'generalize'-but 'in general' I am tempted to use John Bogle's words-they are something like this, 'when a profession with elements of a business turns into a business with elements of a profession'-I would be tempted to warn 'buyers beware'. And this is true for many professions today !
Nice article, Amit. On the subject of telecallers, much of their problems can be traced to their thoughtless machine gun approach to selling. In an increasingly stretched world, this can only result in discrediting them more.ReplyDelete
Keep up the excellent work. Looking forward to more posts.
Thanks all for your kind words and comments. Going by various calls that one has received, one thing is very clear. Many of these guys are trained on soft skills, but lack the knowledge and sensitivity. As I love to say, they are trained for confidence but not for content.ReplyDelete
I wouldn’t blame these telecallers, most of who would be kids straight out of college. They therefore fall in the category of people who 'don’t know that they don’t know.'
However I would definitely question the wisdom of higher ups who invented such business models, especially for financial services and products!
For example, I have got callers pleading with me to trade in stocks. When I politely refuse they continue to pester by wanting to know the reasons for refusing such a lucrative proposal.
Can you imagine a doctor ‘telecalling’ folks in his neighbourhood and asking them ‘why aren’t you ill? And if you are healthy, when will you fall ill?’
And doing all this just because the doc has set a foolish ‘target’ for himself over the next quarter.
No attempt whatsoever at trying to understand the ‘risk profile, asset allocation and financial objectives’ of the patient (investor.)
In my humble opinion-telecalling and pestering people to invest in financial products is a terrible business model!
Let us put the ‘caveat-emptor’ in capital letters ‘BUYER-BEWARE.’
Really good one...ReplyDelete
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Very interesting Amit!!ReplyDelete
Congratulations. Looking forward to more such informative articles.