[ritz3645]

Thanks for sharing this information. I only bank with Public sector banks, earlier UBI & now IOB. Public sector banks are a heaven compared to Pvt banks (ICICI/HDFC/Kotak).
Public sector banks may not look the smartest kid of the lot, but are very dependable with less charges/fees.

[rahul_jo]

I've had numerous first hand experiences with big banks and I've literally seen them chase me around like a chunky kid chases a cheeseburger at times.

They have sophisticated algorithms and analytics in place nowadays. The software does everything for them. Based on your banking habits, it automatically marks you as a "High" or a "Low value customer.

Once they know your true value, they'll assign you a sharply capable hunter, who'll treat you like an ATM machine that will spit out cash somehow. In my case, it was somewhat attractive females a couple of times who seemed very interested in what I did for a living and didn't shy away from passing mild compliments here and there (clearly trying to flatter me indirectly and prep me for an upcoming sales pitch).

Then the circus of calls started, asking me if I would agree to meet them as they had something important to discuss with me regarding my bank account. I often asked them to elaborate over the phone but they'd brush that to the side and would always tell me - "Oh sir, I'll discuss everything once we meet".

Just inculcate a firm habit of saying NO. Regardless of how much they push. Make it a no every single time.

[Foxbat]

Originally Posted by digitalnirvana

Consequently when I started a job and looked for investments or tax savings instruments, I was blindly led by my RMs at Kotak life insurance because my salary account is with Kotak Mahindra bank. Two years back I took stock of my investments and saw I had only ULIPs over 12 years of earning. Nothing else, not a single direct equity nor mutual funds investment. Some of them were even repeat purchases of the same policy in different financial years. They would know all my account balances and inevitably steer me to a policy purchase.

I have no one to blame but myself and my naivety in trusting people. I finally cashed out all of the ULIPs at heavy financial loss / penalty.

To anyone starting out, please stay away from these RMs. Learn and then invest. If in doubt, say no.

I unfortunately was at the other end in this company fresh out of MBA and hired for a leadership position in data analysis. I analysed all the ULIP customer returns which had a total AUMs in thousands of crores and I would say almost all were in loss. The problem was the huge commissions the companies would take (in many cases 25%) so if you invested 1L only 75k would actually go towards your fund value. So you would need 33% returns to just break even! Fortunately the IRDAI put and end to such malpractices.

Fun Fact: Before working in this industry I was myself scammed by a RM who misled me and sold me a product thru which he earned 25% commission and also one useless life insurance policy which I found out about 4 years later. After joining this industry and doing hands on data analysis I realised I had been scammed.

Originally Posted by rahul_jo

I've had numerous first hand experiences with big banks and I've literally seen them chase me around like a chunky kid chases a cheeseburger at times.

They have sophisticated algorithms and analytics in place nowadays. The software does everything for them. Based on your banking habits, it automatically marks you as a "High" or a "Low value customer.

Once they know your true value, they'll assign you a sharply capable hunter, who'll treat you like an ATM machine that will spit out cash somehow.

This is exactly the type of work I used to do, we call it customer analytics/cross sell/up sell.

[Sebring]

Same here. 100% they have their Bank's best interests at heart, and their career. Your financial growth doesn't feature anywhere on the list. I just cut ties with HDFC (Do it fast before they think up any exit charge. LOL)

Originally Posted by jkrishnakj

I am in the process of terminating all kinds of relationships with the bank. I somehow did not want to go down without a proper fight and just this morning , I escalated my grief to the Banking ombudsman. Not that I expect them to resolve , but I am so done with HDFC bank. This is coming from a customer who started with them way back in 2001-2002.

[hrman]

Thanks for sharing this. My approach for many years has been the follows:
1. Subscribe or access good investment advise sites like Morningstar.com or valueresearchonline.com
2. Take stock of all the money you have at your disposal (as savings or as potential monthly savings)
3. Take pure term life insurance policies covering about 10 times yearly CTC early when you start having family liabilities and dependents. I got mine done at 33 yrs. Should have got it done much earlier.
4. Open a demat account with renowned name (I have with ICICI direct and Zerodha, although active on Zerodha as of now)
5. Plan how much money you can put in your MFs through SIPs and have a good portfolio selection spreading the risk.
6. Keep evaluating the returns periodically and switch when desired returns are not met.
7. Avoid credit cards and loans except for Housing or in rare cases for a new Car.
8. No ULIPs. Avoid it like the plague.
9. Take sufficient Health insurance at least upto 75% to 100% of annual income.

A few years back, my ICICI direct RM informed me to go for prepaid brokerage. He also enlightened me on the total amount I have spent so far on brokerage and what I can save, I thanked him for opening my eyes and switched to Zerodha's zero brokerage platform overnight. When he called me the next time, he was talking about the stability of Zerodha etc. I informed him, nothing is stable. Who would have thought the MD and CEO of ICICI Bank of so many years will be involved in a fraud case. He shut up after that.
I do avoid meeting the RMs since I know they will want to upsell some cr*p policy which I am not interested. They are doing their job but not at the cost of your time.

[Balthazar]

Originally Posted by DigitalOne

Can you please confirm if an ICICIDirect RM has transaction level view access to my linked ICICI Bank account? If yes, I would consider it a major breach of privacy/security and then take appropriate steps.

If someone can send me the contract that they make you sign, or the privacy policy associated with their platform, I can go through the clauses and tell you exactly what they can access legally, now or in the future.

Originally Posted by grazd

There is no substitute for education, I have realized that we have all have to learn the basics, if we want to hold on to our hard earned money.

Originally Posted by hrman

I thanked him for opening my eyes and switched to Zerodha's zero brokerage platform overnight.

Could you guys recommend a few resources to help an absolute beginner (who has just begun earning) get started? A few books start with and learn the ABC's of investing for instance. After understanding the basics, we could rely on ourselves, and make informed decisions.

[sagarpadaki]

Originally Posted by Balthazar

Could you guys recommend a few resources to help an absolute beginner (who has just begun earning) get started? A few books start with and learn the ABC's of investing for instance. After understanding the basics, we could rely on ourselves, and make informed decisions.

I would suggest you watch 'Goal based investing' Part 1 to 5 on YouTube channel freefincal. Should be a good starting point for a newbie. The author has explained the basics in a no nonsense way that is easy to understand.

[dean5545]

I have been scammed by ICICI guys not once but twice!
Once I had gone to make an FD and the RM smelt it and managed to sell me a ULIP. I realized my mistake and went to him again within the surrender time period but he didn't budge. That was my mistake should have called the helpline and cancelled it. The ULIP was taken in my fathers name which had high mortality charges as he was around 60years old. Big mistake!

The second time is what gets my goat and what I find unethical. After a year another guy calls my father and tells him that his investment in ULIP was a wrong choice and how he could make things better. He said that bank managers are given targets and they just sell and don't take responsibility and so on. He said he was from HO and he could make things right. My dad knowing that it was a wrong choice agreed to meet. He said he can transfer to a different type of ULIP and that will yield better results where it won't be in my dads name so lesser mortality charges etc. We thought that this change would happen in the existing insurance but it didn't instead a new policy was created and now I had not one but 2 ULIPs. The second guy also got his commission and he went MIA after a few months.
In the mean time the first manager called and said that the other guy is doing wrong and we should listen to him instead. So from that day I vowed not to set foot in ICICI bank. They are like wolves just waiting for a prey. Wonder how many people must have lost their savings in these ULIP schemes and why is IRDAI not doing anything about it!


What I don't like about these guys is that they will bad mouth their own company just for a sale. They don't have any ethics at all. Can you imagine two sales persons of the same company coming to you and telling that the other team are scamsters and I am right listen to me! And the other guy says the same about the first guy.

Of course ULIP itself is a bad product. You will definitely get better returns with a Mutual fund investment if done correctly and a standalone Insurance. With ULIP I don't think you have a chance due to the high commissions involved.

[DreamsUnlimited]

Thanks a lot for this very useful post.

I used to get a lot of calls "advising" me about investment, which I used to reject outright. After a while the calls stopped, probably realizing the futility with me.
But recently, its again started for card protection insurance which seems really desperate as the RMs are almost pleading and the tone gets more aggressive as you keep denying it.
I have blocked at least a few dozen numbers from these agents so far!

[charanreddy]

I have been on both sides of the coin.. so to speak.

Multiple times, whenever I open a back account or think of any investment, the RMs flock and try and show lot of data to sell ULIPs. Their key selling point is that ULIPs generate more returns than a FD with Insurance as well. What don't mention is penalty of not paying even once in a long window. I am firm in my dealings and tell them I have done my research and specifically want a certain product.

About 2 years back I opened a joint account with my mother and surprise surprise the RMs tried to push us into a corner to buy ULIPs. We wanted to open a locker , but RM says they are in demand and can be made available if a certain relationship value was met and tried to push ULIPs. I told them I will do FD instead to meet the relationship value but they didn't budge . So, I don't have a locker but just an account. The key I believe is an understanding of basic concepts like expected value, time value of money and uncertainties that crop over extended period of time. Hence most folks are taken advantage of.

My primary relationship is with Citibank NA where I also worked in consumer banking analytics for about 6 yrs or so. My RM is surprisingly helpful and does not push unnecessary products. I have found the customer service to be next best to AMEX.

[streetfighter]

I've had my share of stories, both with ICICI and HDFC bank.

I invariably get called by my RM the next day my salary gets deposited. He'd start casually asking feedback about services and then move on to gauging my interest on insurance, mutual funds, etc. Somehow I push back but the same calls keep coming back each month without fail post salary. So I guess, they get a trigger once amount gets credited, and yes they do have access to the account total at-least.

I was once forced to buy a ULIP (which I had suspected to be a Mutual Fund Scheme) as part my car loan availing process. The RM convinced me that he'd convert the ULIP purchase into interest free EMI hence I didn't have to pay anything upfront. After I was back home, I did my research online and found that it is a ULIP and not MF, hence requested cancellation (without the knowledge of RM) during the free-look period by calling customer care and sending them email. The RM later realised this and stopped further communication with me.

Another incident which happened recently was I wanted to open a Sukanya Samruddhi Yojna (SSY) account for my daughter with ICICI bank. They tried all their means to persuade me to buy MF/ULIPs, but I didn't budge. They delayed opening the SSY account on the pretext of something or the other and would call me to the bank for document, signature etc and the same selling of MF/ULIPs would start again. Fed up, I escalated the issue online and to the ombudsman after which things got sorted.

As someone else pointed out, RMs after leaving job, take the contacts and call on behalf of their new company. I find this breach of privacy, tried to complain without any resolution.

There are lot of good articles online and youtube channels for starting the financial investments journey. After watching a few, one would get a basic idea of what to do what not. Excellent thread and provides good insight of the reality !

[abhaysinha58]

Thank you for the insight into what goes on in the private banking sector. Seems like a dark dark world. My HDFC RM uses another sales technique..Emotional Sell. He calls me at the end of each quarter or financial year asking me to help him meet his targets by purchasing an insurance plan. I try to stay away from them as much as possible even when they call to visit me as a "courtesy call".

[charanreddy]

Originally Posted by DreamsUnlimited

But recently, its again started for card protection insurance which seems really desperate as the RMs are almost pleading and the tone gets more aggressive as you keep denying it.

Card Protection Insurance is a big fraud. Card is a non secured loan and the only reason to take this insurance is if you are worried about your credit score. However the fees are steep and benefits are miniscule and it makes no sense to take this product. Typically in US, not more than 25 Bps (25 in 10000) fall for this scam in a typical mailer, but once they do revenue from these folks goes 2 - 3 X.

Big card companies have been fined in the range of 100s of millions of dollars for this practice. below are a few.

https://www.consumerfinance.gov/abou...ard-practices/

https://www.consumerfinance.gov/abou...alty%20Fund%20.

@ Mods, I am not able to merge my existing post with a quote. Kindly let me know the right way to do this.

[katsumoto]

It is rampant everywhere and not surprising. There are mis-sold policies for which (Consider a horror story of selling a 20 year endowment plan for a retiree having minuscule gratuity amount - This is not an one of incident) and then there are mis-bought. We have a fear, fear of being missed out (FOMO) so we want to en-roll in everything even if we don't understand.

There is a way out for this. Learning the art of saying "NO". I used to follow Jagoinvestor and subramoney.com. There were really good articles on saying No in these forums.

The thing is financial market or the way we rack money (or loose) is going to evolve. It can be yesteryears Endowment plan, ULIP, MLM, or now MF sahihai or Crypto or RE, it is going to evolve. But you. (Everyone of us) can not evolve continuously but the fear of missing our drive us crazy and just let us throw some money we think significant and later repent for the decision we sought earlier without learning. Remember you can make money in anything or loose in anything. Just pick your comfortable area and find yourself where you fit in (eg: in ULIP you should be better of being a distributor/banker/broker eg 2: in RE you can be broker/investor) learn that area and fine tune yourself. In a long run you will comfortably make money with good XIRR. There is no need to panic buying an un-known area. As long as you learn one area invest depending on the in-flow without much leverage (Caveat: IMO you can leverage only for the things you miss if you don't eg: health / education / bussiness or some emergency) You will achieve your goals in the long run. If you follow this kind of process you will be content and learn to say No to all MLM, ULIP etc.. whatever that doesn't have to bother you.

Have fun...!

[Samratrek]

Just 7 days back I had transferred my FDs from ICICI bank to a more less glamorous bank,as I found my RM give zero service & call only for their products.
It happened that a debit card was issued & the courier agency was not able to deliver that,there were repeated returns & re dispatches , I mean my card was actually travelling all around India for the last 3 months & untraceable. I had called,visited & spoke to my RM but after his assurances he would again start discussing his products.I sent an email to the bank zonal head & that too did not work,finally I felt insecure & decided to wrap off all my funds & ship to some less fancy government bank,at least I would at least less worried.
Regards
Samrat