WARNING: PORTFOLIO MANAGEMENT, WEALTH MANAGEMENT AND ASSET MANAGEMENT SERVICES

 

Dear Corporate honchos, high net-worth individuals and Non Resident Indians (NRIs) – who are too busy, too important, too aged or too distracted to keep track of their hard-earned money, and therefore entrust this job to  Bank’s portfolio management, wealth management and asset management services. Have you signed blank forms and letters giving Bank blanket permissions to trade on your behalf, pay insurance premiums, housing mortgages, bills etc? Has your friendly neighbourhood  Bank, through its relationship manager, convinced you that as a “Premier customer”, the best way to grow your wealth is by giving it the absolute discretionary power to buy, sell and hold instruments such as ULIPs and SIPs on your behalf? Have you given a power of attorney that enables bank branches to take major decisions on your behalf, open bank accounts etc?

And last but not least, does your relationship manager give you figures and vague reassurances over the phone, but avoid putting them in writing — all in the name of “personalized relationship management”?

If you answered yes to these questions, then maybe you should panic. Call your chartered accountant immediately and get him to study whether your funds have grown or remained steady over the past few years… or whether they have greatly diminished.

At various stages of the relationship, smooth-talking relationship managers get these high net-worth individuals (HNWIs) and NRIs to sign disclaimer, waivers and powers of attorney that give Bank’s various branches uncontrolled access to their funds, and helps impose unfair and illegal terms and practices on such individuals. This is done ostensibly to ‘reduce red tape’ and ‘to better manage the portfolio’. With the clean chit now in hand, Bank methodically builds a situation where the expatriate or HNWI customers start complying with unreasonable and dubious demands for fund remittance into the account. Opting for online bill payment and having a credit card makes this situation even more complicated, and gives the bank a massive leverage for upsetting the customer’s daily life. Busy people are so entangled in this relationship with the bank that they fear a messy financial disruption. Expats are often worried about their family members in India for whom these funds were being transferred. And so, they comply.

Aged and ailing people, expats with a busy flying schedule or people going through a professional/personal crisis simply have no energy to seriously take up this fight. So they file complaints to the bank’s higher ups, and receive vague assurances, often in exchange for signatures on waivers, disclaimers and more blanket permissions of the sort that caused their problems in the first place! The mechanisms for “dispute redressal” give customers a false sense of security for a few more months… And the bank’s stranglehold on the helpless customer grows stronger with each passing month, despite his knowledge that he is being sucked dry.

Expats are extremely vulnerable because of (a) the practical difficulties posed by time zones, market timings and office timings (b) different banking regulatory regimes and banking practices followed in India, USA, UK, UAE, Europe and Malaysia.

So ask immediately to your Bank to give you full details of your investments and start transferring funds from those investments where you are facing loses or not getting expecting returns to some safe avenues as suggested by various independent websites or credit agencies.

For other details / queries, drop a mail at prashant.singh@sbi.co.in