I have a NRI Client based out in Singapore, how he became my client is quite interesting.. He has come from Singapore to India on vacation, as all NRI have the habit of generously helping the relatives and friends my client also belongs to the same category. He went to meet his old friend unfortunately his friend has somehow started a investment consultancy business, a sub broker-ship to deal with equities, distribution of all mutual fund products and an agency from one of the leading insurance company. My client earns good money being a NRI but keep his money in NRE account and do some investments in property not much aware of share market investments. When he met his friend he offered him big ideas of wealth creation talked everything about India growth story how markets has performed and how people are DOUBLING their money in no time.. he gave a detailed story about how much you loose if you keep your money in bank ac, how inflation is eating his money and so on... My client being a normal human also started thinking to look out for options to double the money and to take some small risk. His friend advised him to invest 15lac in one single retirement plan of the insurance company which he has taken the agency, and told him you have to be invested only for 3 years in which your money will be doubled.. you can use this just like a sb account and so on. The client was also happy he invested the money in few days he got his policy document and there ends the transaction.
Here comes the twist. .. my client got a new project and have to move to Nigeria. To send few soft copies of some documents to the new employer he went to a cyber cafe which is very next room to my office unfortunately the shop was closed.. he came to my office.. he saw me working in my comp and saw the printer fax all in one in my table. As his requirement was urgent he asked me for help and requested me to scan and send those copies, i agreed and we had general conversation. He asked me about the kind of work i do and he also told about the recent investment he made in the insurance product. I asked him about the amount of premium he told 15 lacs.. i was shocked!!! i asked in detail about his understanding about the investment he made, he told the money will be DOUBLED in three years and it just works like sb account. I asked him are you aware of the charges he told no, i asked him did he go through the policy document he said no, i looked at his face and told him you are cheated. His initial response was not good, he didn't like me telling about his friend, i told him just to go through the policy document and if you need any support do call me or else no issues...
The very next day morning 10 clock he dropped in to my office with policy document bit confused.. the charges of the product is 9% for first 2 years and 3% through out the term. 9% is 135000 which is gone from his account and it will happen for first 2 years. Who is getting tis 9% is his friend as commissions. He gave me the document and told me somehow you help me to come out from this i am ready to pay what ever fees i charge... he was damn sure my fees is not going to be more than 1.35lacs. He was lucky enough that his policy has not crossed free look period first 15 days so can be easily cancelled, i helped him in getting the policy cancelled, .. his friend called me and told that i am a fool and dont know about investment market and how to do business. I was happy that the client is saved and off course there was a selfish motive behind helping him that i get a big HNI NRI client and more reference.
Dear NRI friends people over here (not all but few) believe for NRI'S money is not a problem even they make loss what big deal they will go back and mint money. Beware there are friends, relatives and your own personal banker or relationship manger who may screwup your hard earned money. Ask yourself few questions before giving your hard earned money to some one.
- Why should he recommend this investment avenue
- Be open in asking him about the benefit he is going to get.
- Its business and not charity
- Be ready to pay fee for advice rather than saving 15k and loosing 15lac.
- Every product is good but not always for you.
Cheers! happy investing NRI'S
