When selling costs you trust

Aggressive product peddling by financial entities doesn’t help in building investor confidence


Many find investing complex. There is too much jargon or a fear of lack of control or often genuine concerns are brushed aside as problems of financial literacy. As a professional who teaches finance, I feel the real problem is lack of trust, that needs to be addressed.

Many of us have been driving a car knowing nothing beyond the brake, accelerator and steering. This confidence in driving arises out of the fine predictability of superb engineering. With the exceptions of two situations—insurance claims and the used car market. As they call for are sharp practices that can fool us. In both situations, the problem is aggravated by the unbridled eagerness to sell. A good salesman will convince you to buy and his incentives depend on how much he sells.


When banks began to offer deposits to the public, they did not say that these are borrowings of the bank. Instead they told the public that money kept in the bank would be safe, and can be accessed at any time. Depositors looked up to the bank as a custodian, felt trust when they accessed money and confident with the transparency of statements and interest payments.

That is the power of trust built by consistent and predictable outcomes. When banks overdo the selling and extend it to loans, cards, etc, they chip away at that trust. There are also cultural underpinnings to how trust is built. In India, historical dependence on the benevolence of the king and a post-independence preference for a socialistic model, have meant that people trust the name, or the ownership. This orientation has sometimes led to outcomes that are harmful to investors.

Consider the contrast between the insurance and the mutual fund industries. The former uses an army of agents to sell products that have come under fire for being misrepresented and mis-sold. But the common investor is fed sales pitches. The incentive schemes in the insurance business lure a million agents. At the apex of the insurance industry is a government-owned behemoth. Every sale of failing businesses by the government to its investment account raises concerns. But life goes on. New products are launched and in the 25 years of opening up the business to the private sector, the benefits have been mutual. The sales pitch of the private sector has enhanced the product penetration for the government entity; and the trust invoked by the government entity has helped in breaking barriers. Presence of the big brother means sharp selling practices don’t receive the regulatory rap.

That stricturing is reserved for mutual funds. Here is an industry with a useful product, high efficiency and low costs. But it has struggled to gain trust and respect. Three things work against it: One, it is dominated by the private sector; two, it has no big brother with a Delhi connection; three, it practices exploitative selling at every given opportunity. Building trust has only gotten tougher.

Selling is rampant across businesses. However, there is huge conflict between selling compulsions of a business and the trust-inducing conduct investors seek. We cannot just assume investors are financially illiterate or that investing is unduly complex. Sales pitching as an identity of financial services sector must end. What use is growth if it does not foster ethical conduct? Of what good is a brand if it does not invoke trust?

Arguments over money can prove toxic in a relationship

Do you have money fights?
Arguments over money can prove toxic in a relationship. Find out how to resolve issues

Well-paying jobs, a beautiful new house, a lovely child… it seems Ashmit and Sonali Seth have it all. But beneath this veneer of a happy existence lurks an uncomfortable reality. Ashmit lost a lot of money in stocks last year, and Sonali is worried that he is trying to make up by taking bigger and riskier bets. “My husband lost almost ₹10 lakh in stocks. He doesn’t share details with me anymore but I fear he still invests in shares,” she wrote to ET Wealth last year.

The Seths are not alone. A lot of families have disagreements over financial matters. Almost 55% of the 550 respondents to an online survey conducted by ET Wealth in January said they have frequent fights over money with their life partners. We look at the five reasons why couples argue about money and how to resolve or avoid them.


Overspending, the biggest villain

Our survey shows that overspending habit of their partners is the biggest cause of discord among couples. However, in most cases, it had little or no impact on family’s savings (see graphic). Experts say spending is not a problem if you save and invest for your goals. “Overspending will not affect savings if you invest at the very beginning of the month. This reduces liquidity and prevents unnecessary spending,” says Renu Maheshwari, CEO and principal adviser, Finscholarz Wealth Managers. If the partner uses a credit card for splurging, couples can establish accountability by checking each other’s card and bank statements regularly.

If partner is tightfisted

The flipside of overspending is another reason for conflict. If one spouse is frugal to the point of being miserly, the habit can be as frustrating. Experts feel that it is important to understand the reason that drives this behaviour. “Usually, if the money situation was tight during the growing up years, people get conscious about spending. Fear of going broke drives them to save every penny,” says Suresh Sadagopan, Founder, Ladder7 Advisories. Or it could be that the person is trying to be an antidote to the partner’s overspending. Instead of just saving compulsively, you should link your investments to specific goals to determine how much you should be saving.

To lend or not to lend

Lending to relatives and friends is the third major cause of money arguments. About 33% respondents said that financial support to relatives was frustrating. But supporting the family or a friend in need is alright as long as it doesn’t affect your own financial plan. Rohit Shah, Founder, Getting You Rich warns against being the go-to lender in your social circle even if you have all your goals well planned for. A good alternative is to provide help in non-financial ways. “Defer the response a few times, then offer alternate help to money, such as guidance for money management. You will tactfully end any future requests and also help your friend from getting in a habit of asking,” he says. And whatever the case, do not lie to your spouse about lending.

Dealing with lies

The foundation of marriage is trust and understanding. But our survey shows that only three out of 10 people can trust their partners on money matters. Also, one out of four respondents argue with their partners for being secretive about money. Hiding purchases is the most common money lie among couples. This is mostly due to fear of disapproval of the spouse. Another reason is when money power is concentrated with one partner. This is common in the case of homemakers who feel the need to lie when they are accountable for every penny they spend, especially on personal expenses. To tackle this, couples should jointly decide household expenses and investments. The balance can be used for discretionary expenses, which each partner can spend without feeling guilty.

What couples don’t discuss

The survey shows that compared to overspending, partners don’t clash as much over the ways they invest. This indicates that couples fail to comprehend the long-term outcomes of their investments.

Overspending is a bigger villain because it is visible in the pile of unnecessary stuff lying around. However, it can be easily tackled by budgeting. Whereas if you don’t question hidden losses from your partner’s wrong choice of investments, it can damage your finances adversely. For instance, an ultra-safe but low yield portfolio of insurance, fixed deposits and gold may lead to suboptimal returns. Or like the Seths, if your partner recklessly invests in stocks and equity for the short-term, the household kitty may end up losing money.

Experts say lack of financial knowledge is the key reason why couples don’t discuss investment choices. Many also ignore this issue because they don’t realise the urgency of goals far in the future.

Heptathlete Swapna Barman

‘I’ll be happy if my biopic can inspire youngsters’
Heptathlete Swapna Barman, who bagged a gold at the prestigious 2018 Asian Games, talks about her dreams

Last year, heptathlete Swapna Barman made the country proud when she bagged a gold at the prestigious 2018 Asian Games in Indonesia. It wasn’t easy for the 22-year-old as she had to overcome a series of odds to achieve the feat. Swapna, who is from Kolkata, comes from a humble background. While her mother works as a tea plantation worker, her father has been bed-ridden after a stroke in 2011 following which Swapna was left to fend for herself and also train to realise her dream of making it big in the international level. She also had physical hurdles to overcome. With six fingers on each feet, she had to accumulate enough money to buy extra wide shoes.

But today, the athlete’s life is set to inspire many like her as director Srijit Mukherji is planning a biopic on her. Set to go on floors in 2020, actor Sohini Sarkar will essay the role of the star athlete. In a candid chat with us, Swapna talks about hardships, her Olympic dreams, love for biryani and more. Excerpts:


What’s your reaction to the news of your biopic?

The news makes me happy. But I don’t want to talk about the film at all. My focus is on my preparation. If I can’t perform well in my forthcoming Asian Championship in April, nobody will bother to take note of me. I stay at SAI and practice daily. I practice for four-and-a-half hours during the morning. Late afternoon, I am again back to my practice grounds for two hours.

There is an apprehension that the news of a biopic might shift your focus from the sports to the glamour world. Do you believe it?

No, I don’t think so. I am not talking about the film. I am busy with my practice. It will be good if some get inspired after watching the story of my life on the big screen. I will be happy if my film can inspire youngsters.

How has life changed after you clenched the gold medal at the Asian Games?

Earlier on, when I used to run or take part in any event, not too many would take note of me. These days, whenever I go out, there are so many requests for selfies. I have seen times when people were apprehensive about having faith in my abilities. Now, they are more forthcoming. They believe that I can make India proud and bring home medals.

Is this faith only because of your win at the Asian Games?

My medal at the Asian Games changed the mindset. Before a person goes on to win something, nobody really wants to talk much about his or her talent. The medal creates the difference. Now, I find myself in a space, where people are talking about me. Earlier on too, I had won the Asian Championship. Unfortunately, there was hardly any adulation for me after I returned home following my win there.

At 22, you have achieved so much. What else do you think needs to be done for other Swapna Barmans to come up?

It is very tough to reach where I find myself now. I had sought help from so many people then. Few came forward. Many didn’t. I would want budding sports personalities to be helped.

If the prize money is increased, it will inspire many more Swapna Barmans to come up. From the kind of background that I belong to, it is important to get a job. If someone says that an Asian Games medal-winner will get a big amount of money, it will inspire many to come and play the sport. I wish aspirants from Bengal too are supported just like their counterparts in other states are. They get prize money worth crores.

You had wanted customised shoes for yourself. Has that been taken care of?

Yes. I have got a pair for 100m hurdles. I’ll have to see how it works in the forthcoming competition.

What are your dreams now made of? Do you have the great Olympics dream?

Every athlete dreams of participating in the Olympics. I don’t know if I will bring home a medal but I certainly want to see myself among the best 10 or 12. Besides, I want to build an academy where I can train youngsters. Many have helped me and I want to give my support to those who are coming up.

When you look back, what do you see as your toughest phase?

It was very difficult to overcome the multiple injuries that I have suffered in my career. I already had injuries in my hip and knee. But at the Asian Games, I had a teeth infection. My cheek was swollen. Overcoming that injury and then competing in the games is a part and parcel of a sportsman’s life.

Your father had suffered a stroke. Did that affect your games?

It was tough. But my family members didn’t want me to worry about that though I couldn’t completely avoid being tense. Whenever I called back home, Baba would say: “Puchu (my pet name), you work towards reaching your dream. Practice well. I am fine. Your mother is there to look after me…) However, what really unsettled me was the lack of faith that some seniors showed in my skill. After my injuries, I’ve heard comments like: ‘Oh, she is finished. She won’t be able to go any further’. Some had even set targets and said I wouldn’t be able to go beyond 5,400 points. Even important athletes have passed such remarks. Today, I wouldn’t want to take their names. Dealing with such negativity was very challenging. I used to feel that it is really unfair to pass such remarks without knowing my capability.

There is a buzz doing the rounds that Swapna has fallen for someone…

(Laughs) I have many friends. My coach (Subhash Sarkar) is very good. He has asked me to avoid matters of the heart as long as I am playing. He has told me not to have anyone special in my life as of now.

What do you have to say about sprint sensation Hima Das?

I am glad that she is performing so well at such a young age.