Misselling is high when markets are doing good. Simple reason, when it is easy to nudge people to invest you can play with emotion and sell crap. Off late I noticed 2 new ways of misselling financial products. These are new trends emerging for internet and present lifestyle. Let us see these new misselling ways and save some lives.
Today we discuss entirely 2 new ways of misselling financial products or increasing the malpractice.
Misselling is very prominent in Mutual Funds & Insurance. Old tricks still continue to exist. On an average, I meet one customer per week who has been sold insurance or mutual funds in a wrong manner. Either they don’t need the product or they have been misinformed about features an expected return.
Misselling Financial Products
Misselling Financial Products also extends to social media. It is still not controlled by any regulator. So this gives a way to many fraudsters to start chain messages. When a person receives the same message from a different source he believes it. The result he buys a product not suiting his goals, risk appetite, and pocket.
Media is good and bad both. I am not talking about noise that they make. Apart from the high pitch noise they create, one of the ways is to get involved in the name of advertisements. We will see example below how they do it.
Also, another classic old way is to play on emotions. Strike when you are emotionally in a different mood. We will see some example of this type of selling later in this article.
Misselling Financial Products New Way No 1 – Sponsored Posts
Now, these misselling guys have become even more clever. They know many people are on the internet. So the best way is to influence them by writing articles and analysis.
So in name of “sponsored post,” they will contradict the integrity or correct selling.
I will try to make you understand this by a recent example.
One of our young investor who likes to read & understand, sent me this link in on the WhatsApp.
This post is about ULIPs and article aims at proving it a “great tax saving” product. We all know they are making a case against ELSS mutual funds. I cautioned everyone that, after the introduction of LTCG of 10% in MFs, the Insurance industry will start pitching ULIPs aggressively. (Link Here)
And they are doing it.
Now if you see this post you will observe in the end that this is a sponsored post.
The link to the sponsor is also there and you can see that in form of the article how a lie is spread in front of you.
The media house publishing it gets money or advertisements to publish these articles.
Do you think by just mentioning “this is a sponsored post”, they are free from their moral duty? I know they have expenses and are in business but do you think this is right?
Now see how the same media house contradicts its own story by their own story published at different times.
The second link is just 5 days old.
Lesson for the investors
There is nothing illegal here. So media has full right to do it and also they have right to reject these proposals. Like we do. We thewealthwisher.com have never published any sponsored post from any brokerage, insurance, P2P company or from any MF company till date.
But you need to keep your eyes wide open. Just do not believe in one article or post or write up. Do a broad-based search. Many times you will find top bloggers, industry professionals recommending you certain products. You need to check whether they are doing it genuinely or getting paid to influence.
Marketers have developed a new category called “web influencers”. Many times you will see the blog you are reading or website you are searching for information will contradict what they have been propagating. Now you know the reason: Sponsored posts.
Misselling Financial Products New Way No 2 – Hit the festivals
Have you started celebrating new festivals like father’s day or Halloween?
Yes with new changes many of these special days have entered our homes due to marketing & media hypes.
8th March was Women’s Day, and I also celebrated it with my 3 ladies at home. Rasgullas this time.
But here is what I want to highlight.
This women’s day probably you were hearing from last 2-3 days about the hype. On the day:
- You must have gotten up, wished women/girls in the house.
- Read newspaper. The normal paper was also pink (due to an advertisement to make your woman happy)
- They on way to office radio playing women’s day songs.
- In office also you met women and wished them and saw their cheerful mood.
You talk & listened to the glory of the day and then suddenly this comes on WhatsApp:
You will be inclined. isn’t it?
Will you bother to enquire or check “has government really announced the Women Special PPF”
Marketers have found this new way of “organizing mass sales day on festivals”
And, look how they are selling an old traditional insurance policy by giving it a new name.
Clarity by Market Expert Mr. Manoj Nagpal
Women Beware! Don't be fooled
This is a fraud scheme being circulated by some agents
There is no special scheme for Women by LIC @LICIndiaForever for tomorrow
This is LIC Jeevan Labh (Endowment) shown with "humbug" figures with no basis!
Will LIC @LICIndiaForever clarify? https://t.co/lLu3OYIkeJ
— Nagpal Manoj (@NagpalManoj) March 7, 2018
Lessons for the investors
Social media is a huge dark well with many ghosts with dubious identity. It is difficult to catch who is behind such campaigns.
But yes, the company mentioned gets benefit due to missing that happens and the investor gets cheated.
Again buyer needs to be aware and beware. Do not be a WEBAQOOF.
Hope you will be careful when you surf internet & WhatsApp for knowledge. Financial markets are full of greedy people.
Forward this article on Misselling Financial Products, so that you family friend read good things. Do share your views & experience in the comments section below.
