Hi,
In this article I will discuss on how you should deal with your Relationship manager or any sales person before you invest or buy any financial product.
1) First things first, always go by reference for selecting a Sales person for your investments. Never approach Company directly asking them to help you in investing.
2) Your investment advisor and sales person should never be same. Example you can take advice from your auditor or your friend, lets say your auditor advises you to invest in a mutual fund scheme of HDFC Mutual Fund (example). Now you directly approach HDFC and buy the particular product your Chartered Accountant or friend has advised. This is Important because in most of the cases the sales person makes you to buy the product on which he can earn maximum commission or incentives.
3) Clearly ask the sales person as to how much Commission or margin he or his company will get if you buy a product from him. For sure most of them will try to confuse you in terms of different Percentages and slabs. Stop them and ask exactly how much in terms of amount and not percentages.
4) Always understand that each sales person selling investment products will have around 5 to 10 times of his salary as monthly revenue target. It means chances are he will push you a product with high margin to achieve his sales target.
In my next article, I shall explain 5 simple and easy really easy steps in selecting a good Mutual fund scheme.
Thanks & Regards
Vikram
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