5 ways you can identify and avoid investment misselling

Never believe a plan or an offer till you see it in black and white. Also, make sure that the brochure or table shown to you is authorised by the company. Agents often get promotional material printed with promises of lofty returns. Also, check the credentials of the seller. If he is promising high returns, ask him to write it down and sign on the paper. This can nail his lies later.

Text: ET Wealth

Anybody who pushes you to invest within a deadline is probably mis-selling. An investment is not an FMCG product bought from a roadside vendor. Don’t close the deal in the first or even the second meeting with the broker. Ask for at least 7-10 days to study the plan and its features. Tell the distributor you will compare the plan with other investment options before deciding.

Discuss the plan with a friend or relative who is an expert before you invest. If the agent knows you are consulting an expert, he is less likely to mis-sell. The worst mis-selling happens at banks, where relationship managers try and push high commission products to unsuspecting customers. Go to a financial planner, who charges a fee, but gives objective advice.

Missellers succeed when the investor is unwilling to spend time to understand what he is buying. Most of the time the buyer just signs on the application form and leaves the paperwork to the agent. If you don’t want to get bogged down with paperwork, let him fill the form for you but insist on seeing it before you put your signature on it.

If the policy document does not mention the promised benefits, return the policy within the 15-day freelook period. Agents try and buy time till 15 days are over. The policy document should reach you within 2-3 days of issuance. Before that, you will also receive a phone call from the company. Listen carefully to the policy features and raise a red flag if something is a miss.