Moneylife Digital Team 22 January 2014

Every second person claims to be a financial advisor now. There is a plethora of magazines that write about various financial products, like mutual funds, bonds, etc. Even mainstream media (newspapers like Times of India and Economic Times) give plenty of unsolicited advice. Every bank today claims to offer advisory services and, invariably, the people at the helm of these services are more salesmen than financial advisors.

Credibility and credentials in financial services are important but, unfortunately, these are being used to exploit gullible customers. At the end of the day, it is our hard-earned money and, if the financial advice ends up as erroneous, where do, we, consumers go? The money lost is lost forever. Ironically, many bank managers simply delegate this task of financial advice to the so-called advisors who are not very knowledgeable themselves.

Digressing a bit, even insurance companies (LIC, for instance) lure customers through attractive advertisements; but when a policy matures, the penny drops and customers realise that there is a huge gap between what was promised to them and what they have actually received. Sales people are worried only about their targets and, somehow, once this target is achieved, service takes a back seat. Insurance companies are smart in that they seldom give greater publicity to term insurance schemes as these fetch low premiums. Not many investors know that insurance agents are more driven by their commission than the interest of the investors.

What then is the solution? Investor education is important. Every investor needs to know about the risks involved in mutual fund schemes. Depending on their risk profile and appetite, they should make an intelligent decision. In India, this (investor education) is woefully inadequate and there is hardly any stress on creating visibility about investor education. Hence, it is important to recognise the contribution of Moneylife in this arena in the past few years. Time and again, Moneylife has blown the whistle on mis-selling, mis-communication, ponzi schemes, mutual funds that have tanked, misleading advertisements about financial services and multi-level marketing schemes.
G Venkatesh,
by email

This is with reference to two dubious initial public offers (IPOs) in 2011 which have attracted the attention of Securities and Exchange Board of India (SEBI), namely, Tijaria Polypipes and Taksheel Solutions. SEBI’s way of investigation has not helped the common investor at all; the promoters continue to remain in business and have been ‘punished’ only to the extent of not being allowed to trade in securities in future!

While Tijaria Polypipes is down 90% from its IPO price of Rs60 a share, Taksheel Solutions is in a league of its own. Down over 95%, it has not released quarterly results in this financial year and has been suspended from trading on NSE as well as BSE platforms.
SEBI should initiate criminal proceedings against the promoters, seize their ill-gotten assets, wind up the companies and distribute the proceeds to the non-promoter shareholders of the company and to the lending banks. Only then will the trust of the common man in the capital market be restored.
Lokesh (surname withheld), by email

I was admitted to Hinduja Hospital at Khar West (Mumbai), late evening on 30/09/2013. On admission, I requested for a twin-sharing room but I was given a single room with the lame excuse that no twin-sharing rooms were available. Next morning, I noticed that two twin-sharing rooms were vacant on the same floor. This was brought to the notice of the staff. At 12.07pm, I was offered to move into a twin-sharing room. On inquiry, if I would be charged for a single room for that day or for the twin-sharing, I was clearly told that for the second day also I would be charged for the single room! Where was the question of shifting then? I then decided to shift to another hospital the next morning because of their callous attitude.

My request to the Hospital to refund my medical charges, which are higher for a single than a twin-sharing room, have been refused on flimsy and unconvincing ground that the twin-sharing rooms were previously booked.

Another point I brought up was for wrong and excessive billing, for which no regrets or proper explanation have been given. It is justified, as if it is routine!

It is surprising that a hospital of such repute has such low and poor administrative systems. This complaint is also to highlight how patients are treated and fleeced as they have no control over the situation. I am a retired person and a senior citizen and have to request you to take up this matter and help me get a justified refund as I have paid from my pocket.

Maybe my experience will help other patients to be more alert and aware.
Capt. Sunder Idnani, by email  

Recently, there has been media hype about the Justice AK Ganguly episode. I want to highlight the Visakha case law on sexual offence at workplace (both in private and public sector). The Supreme Court guidelines, only in the Visakha case, indicate that grievance cells for sexual offences should be formed everywhere between employer and employees, schools and colleges. But I have not found such cells about sexual harassment even in Indian courts. Why? Is it the privilege or immunity of the court staff? They are also employed by the judiciary. There must be a committee or a grievance cell for court staff for sexual harassment cases. Moneylife readers should search for grievance cells in all workplaces.
Advocate Dipak Chatterjee, by email   

Financial audit and costing procedures and practices prevailing in our country are a total eyewash and far from hardcore facts. They give a totally misguided picture of the so-called developing economy of ours and have developed the ‘voucher-based economy’ over 60 years. It has made nonsense of MRPs (maximum retail prices) of manufactured products and sky-rocketing real estate prices. Our rulers and the so-called financial pundits and our credit rating agencies, who give unrealistic credit labels to our financial and industrial firms, misguide the common man, and the administrative machinery, which implements these, is responsible for making our masses poorer and poorer day by day.

To overcome this negative effect, our financial audit and industrial costing procedures, practices, rules and laws need to be totally modified on fact-based economic and social grounds.
DA Bhatt, by email 

This is with regard to “Quantum MF head, Ajit Dayal, hits out at HDFC MF”. A simple solution for investors would be to skip advisors and go for the direct plan. And, for advisors to skip advising investors and focus on their own investments! Why bother about wasting time on a meaningless exercise?
Nilesh Kamerkar

This is with regard to “Who is Devyani Khobragade?”. It would also be interesting to find out this impressive lady’s career path. Father and daughter duo seem to have worked the system very well.
R Balakrishnan

This is with regard to “Moneylife IMPACT: Reliance Life refunds Rs3 lakh to an illiterate old widow” by Raj Pradhan. This is a highly commendable achievement for Moneylife Foundation and a graceful act of Reliance. Congratulations!
Yerram Raju Behara

This is with regard to “Iron ore mines: Is it Goa’s time to get the ban lifted?” by AK Ramdas. Iron ore from Goa is not suitable for Indian steel mills because of poor ferrous content. Goan ore is, therefore, exported to Japan and China. It remains to be seen whether the Parrikar government can prevent iron ore miners from going overboard to fill their coffers. If indiscriminate mining resumes, the government will have a major problem on its hands. Most of the people employed directly by Goa’s mining industry are migrants while the locals are engaged in ancillary industries like hiring out trucks to the mines. Thus, when mining is indiscriminate, only a handful of local people benefit while everyone suffers from pollution of air and water and depletion of natural resources.
Shiv Kumar

This is with regard to “Wealth Creators 2004-2013: Which Indian companies have generated the maximum wealth?” by Jason Monteiro and Pratibha Kamath. This is an excellent piece on penny stocks of 10 years ago which have grown substantially over the past decade.
Suiketu Shah

resistance to transparency
This is with regard to “ CAG can audit private telco’s accounts says Delhi High Court”. If the cardinal principle of financial management that sources and uses of funds should be subject to prudent accounting when money is collected from public is still valid, contesting the right to audit by those vested with that responsibility doesn’t stand reason. What baffles the common man is the resistance to transparency in accounting, whether it is gold or money or any other assets. ‘Public funds’ will have to be accounted in a transparent manner and should be subject to scrutiny.
MG Warrier

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