Wednesday, October 15, 2003

All under one roof

Assessing the new-generation banks' claims to being your one-stop money managers.
Gautam Chikermane
THOSE SEVEN bright red pieces–five triangles, one square and one parallelogram–represent a bank. Invented in China two millenniums ago, the game of Qiqiaoban (seven clever pieces), now popular as Tangram, was designed to tickle the analytical abilities of children. The myriad shapes–of people, objects, letters, numbers, ideas–that these seven modest-looking pieces can morph into boggles the imagination. Quite like the transformation your bank has undergone does.
Hardly a decade ago, that bank, a service-less PSU entity, was only good to park your salary and some fixed deposits; if you were a collateral-backed businessman, you used the bank to borrow money. Your ‘relationship’ with the bank depended on the level of intimacy with the bank manager, your ‘contact’; the perks were mostly quicker service–often, simply service.
Today, the bank has outgrown the confines of a branch building and traditional ‘service’. It is no longer the lowly safe-keeper of your salary. It aggressively pursues you with offers of loans to buy homes, cars, consumer goods. It sells you mutual funds and insurance. If you’re reasonably well-off, it aspires to manage all your investments. It pays your bills. What next? It will probably offer to pick up your children from school.
Opinion in Outlook Money

'You Will Get Unbiased, Unambiguous Advice'

Interview: Sanjay Sachdev, Chairman, Association of Financial Planners
Gautam Chikermane
Formed in 2001, the Association of Financial Planners is today a body of 24 institutions (four insurers, nine mutual funds, five banks, three distributors, three other institutions). As its new chairman, Sanjay Sachdev has his job cut out–getting the industry, regulators, corporations and individuals to buy financial planning as a concept, and building a team of certified financial planners. Excerpts from an interview with Gautam Chikermane:
What are your priorities today?
We need to get accreditation from the industry and the regulators. Every participant should be involved in marketing financial planning, and take it to the masses. This includes banks, which are involved in financial planning and distribution. Every financial planner, whether corporate, individual or manufacturer, whoever is interested in financial services, should become part of the financial planning industry and help nurture the financial planning movement in India.
We need to learn from those who are already in this business. There is a huge body of professionals engaged in advising investors, helping them buy mutual funds, insurance, pension products and so on. Our goal is also to help them sell the right product by educating them and spreading more awareness.
We also want to expand the role of financial planning and to get it recognised by regulators.
Do you have the competency to do all this?
There is knowhow in other parts of the world. Our effort is not to reinvent the wheel but to use the wisdom available to us from our global partners and utilise it here.
Interview in Outlook Money