Letter to BS: Rampant mis-selling of financial products in Indian markets

Now that income on a sale is deferred, attention will shift to insurance products

“Rampant mis-selling of financial products’’ by Sanjay Kumar Singh (November 12) is a timely article.

One of the main reasons for mis-selling is the seller’s own lack of knowledge and understanding of the product for sale. The frontline staff, trying to sell the product, knows little about the comparative advantages of products offered by competition. Though it is mandated that persons selling financial products have to be certified, the rule is usually not followed. 

Some recommendations of the Bose Committee have been implemented -- such as, elimination of upfront commissions on mutual funds. Only trail commissions are now allowed which will accrue