Misselling and Relationship Managers (RM):
As soon as you open a bank account, or take a mutual fund or insurance or any financial products – you get that call. The Welcome Call. This welcome call is our initiation into the world of Relationship Management.
As the name suggests, you expect that the relationship manager (RM) wants to build a relationship with you. This relationship must be mutually beneficial for both the parties- you and the financial institution.
The truth couldn’t be further from reality. More often than not, the RM’s only objective is to sell you more products at any cost rather than building a beneficial relationship. Let us try to peel this and see why this behaviour occurs:
- Targets and More targets: Your sweet talking relationship manager has immense pressure to sell and meet the monthly targets. Since each RM can manage only a certain number of customers, the only way to meet his/her target is to sell more to the same of customers. This is known as cross-selling in the financial world.
- Contest and More Contests: To achieve these targets, seductive contests are run by the management which supercharges the target achieving battle. To give you an idea about the prize – it can be a foreign trip with family or bonus upto twice the annual salary etc. Now every RM wants to win this contest. A few will win, but the vast majority of RMs in trying to win the contest would just sell you anything.
- Service is not RM’s job: Most institutions have service team decoupled from the RM team. Naturally, that means the Relationship Managers are not incentivised to give you the service you need or want. They are there just to sell you the products, not to look after the services.
Combine these three things and you know that there is always an ulterior motive when your sweet-talking relationship manager talks to you.
Live mint published an article in Dec 2019 which says Complaints related to misselling of financial products on the rise. RBI said misselling complaints have doubled in the year 2018-2019 compared to the previous financial year.
We are also seeing the same trend while talking to many customers on a daily basis. People like you are being mis-sold from loans to insurance on a daily basis from RM’s. Misselling is happening even in the name of saving taxes as well.
Since monthly target pressure and money motives will keep on fueling RM’s to do the same things. You should know your rights and protect yourself from your bank’s misselling practics.
If they pitch a product to you, before pressing the yes button do try our RefreshMint App which tells you independently and in an unbiased manner if you are being mis-sold. Check out your financial health now.