How your own “Relationship Manager” cons you!

I have my salary account in a famous bank in India. Let's call it ABC Bank for the sake of anonymity. All banks are the same though.

ABC Bank

ABC bank has assigned me a “Relationship Manager”. She keeps calling me once in a while to check the account is working okay and if I need any help. If I do need help, well and good. She will guide me and show me steps ahead. After that little help, without consciously thinking about it, I have taken a favor from her. She has an image of a helper in my head. My reciprocation kicks in.

Immediately after that help, I will be offered a visit to my office by their colleagues to help me with N number of other things like Investments, Medical Insurance, Life Insurances, and whatnot. These products will have a lot of commissions baked in for them and mostly not in your favor. They will “sell” you the products that are really harmful to you. It’s a play on your psychology to rip you off of your money. This is a classic example of a “Broker” or a “comission agent” in the disguise of a helper or an advisor.

Your Relationship Manager is not your friend!

XYZ Bank

My Elder brother who is planning to get her daughter married in 3–4 years, asked his Relationship manager for some advice about how to invest money. His RM suggested him this:

Plan: Pay some money for 6 years and then nothing for 8 years.

14 Years of lock-in! My brother wants to invest with a time horizon of 3–4 years for his daughter’s marriage and this guy is suggesting him a product with a lockin period of 14 years! He is luring him saying that it has a 10.26% return. If you do the math, true CAGR is 5% which is less than inflation in India. The hell with your relationship manager. Get educated guys.

Hire a Financial Advisor who is NOT your broker.