Tips to ensure your agent doesn't cheat you

MIND YOUR MONEY: Mis-buying is as much a problem as mis-selling.

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Gone are the days when financial products meant only fixed deposits and small savings schemes. Now, there are an array of investments for your benefit!

For instance, there are insurance plans that provide equity and debt investment like Unit-Linked Insurance Plans, investment plans that provide insurance like Systematic Investment Plans + Insurance and so on.

With so many products, it is easy to get sweet talked (by an agent) into investing in the wrong schemes. And that's probably why you find young people with an insurance cover that they don't need and many more such cases of mis-selling.

The intense competition amongst financial players has only made matters worse. Distributors and agents with unattainable sales targets pitch products left, right and centre. After all, what do they have to do with your needs and goals, they earn their commissions!

However, mis-buying is as much a problem as mis-selling. Too often, the real culprit is staring back at you every time you shave!

So, here's what you can do to avoid getting caught in the net.

• Firstly, do you need the investment? If you have no dependents or loans to pay, say goodbye to the insurance agent!

• Verify the credibility and knowledge of the agent before handing over your money. Ask him for three references. Speak to those clients and find out their views.

• When it comes to your money, no question is foolish. If you do not understand even a small aspect of the product, ask! Buy only after you are thoroughly convinced and have understood everything. For instance, I met a top film actor, producer and director recently. He had no qualms asking the most basic questions such as, ‘What is equity', 'Why do you say equity gives the highest return?' I felt honoured at spending half a day with him and a few of his friends.

• Pay attention to all that your advisor or agent speaks. Do not take things at face value. Whatever your agent says might not necessarily be applicable to you.