Brokers no more a safe bet to investors
Nearly 60% of the respondents in a survey claimed to know someone that had been cheated by a broker.
By TNN |
MUMBAI: As more and more Indian retail investors have been riding the ups and downs of the stock markets, they’re encountering problems other than erosion in their net worth. According to the India Investor Experience Survey - an e-mail survey of nearly 7,000 individuals conducted by Starcom Worldwide - a part of the Starcom MediaVest Group, a little more than a third of all people who invest in the stock market believe that they’ve been taken for a ride by their broker.
Says Ravi Kiran, managing director (South Asia), Starcom MediaVest Group, “The client-broker relationship is normally a very close one and we didn’t expect one in three to feel cheated by the broker.”
What’s more, from all the people interviewed, nearly 60% claimed to know someone that had been cheated by a broker.
From those that felt cheated, nearly 84% of respondents claimed to know a relative or friend who had met pretty much the same fate.
Also, this feeling of being cheated exists has no geographical bias: a similar percentage of respondents from all cities considered felt they were cheated.
Those respondants that had been stock market investors for over three years felt they had higher chances of being cheated, quite the opposite response from those who had invested for less than a year.
According to Ravi Kiran, the other big surprise was that more than half of all respondents were salaried employees with the private sector. He says, “The perception is that salaried employees in the private sector don’t invest their money in the stock market, and prefer to stick with fixed deposits.”
There’s more bad news for brokers. Two-thirds of all respondents to this survey feel that brokers’ advice is not fair and unbiased, and not always in the best interest of the clients.
From among the respondents, it’s the self-employed professionals who feel they’re being cheated the most, whereas housewives and retired people don’t feel as strongly about their broker’s dishonesty.
Finally, 53% of all those interviewed feel that a flat brokerage is not warranted and is unfair.
One of the respondants felt that there should be an ombudsman in each city who can take up consumer grievances with brokerages immediately. Nearly 70% of those surveyed say that they find that trading online is secure, but even within this group, 13% of people aren’t entirely convinced that it’s extremely safe.
Says Ravi Kiran, managing director (South Asia), Starcom MediaVest Group, “The client-broker relationship is normally a very close one and we didn’t expect one in three to feel cheated by the broker.”
What’s more, from all the people interviewed, nearly 60% claimed to know someone that had been cheated by a broker.
From those that felt cheated, nearly 84% of respondents claimed to know a relative or friend who had met pretty much the same fate.
Also, this feeling of being cheated exists has no geographical bias: a similar percentage of respondents from all cities considered felt they were cheated.
Those respondants that had been stock market investors for over three years felt they had higher chances of being cheated, quite the opposite response from those who had invested for less than a year.
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According to Ravi Kiran, the other big surprise was that more than half of all respondents were salaried employees with the private sector. He says, “The perception is that salaried employees in the private sector don’t invest their money in the stock market, and prefer to stick with fixed deposits.”
There’s more bad news for brokers. Two-thirds of all respondents to this survey feel that brokers’ advice is not fair and unbiased, and not always in the best interest of the clients.
From among the respondents, it’s the self-employed professionals who feel they’re being cheated the most, whereas housewives and retired people don’t feel as strongly about their broker’s dishonesty.
Finally, 53% of all those interviewed feel that a flat brokerage is not warranted and is unfair.
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One of the respondants felt that there should be an ombudsman in each city who can take up consumer grievances with brokerages immediately. Nearly 70% of those surveyed say that they find that trading online is secure, but even within this group, 13% of people aren’t entirely convinced that it’s extremely safe.
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