Bringing quality in financial services

There is a peculiar problem in the financial services industry. A large number of distributors impaneled by mutual funds and insurance companies are inactive. Banks and brooking houses also report that relationship managers, who have been recruited and trained, are unable to post adequate sales. There is a general hue and cry about a stringent regulatory regime and how it has curtailed the growth of the business. There may be a different story at player case of sheer lack of quality and disrespect for process.

In the interest of the investor, it is important that those who sell financial products and services are put through a qualification process. The minimum qualifications required to be able to sell financial products can include age, experience , a certain level of education and mandatory certification. The minimum qualifications prescribed by regulators are also called gate keeping requirements. The objective is to ensure that those approved by the regulator alone can become authorised selling agents. In the Indian markets, the sellers of financial products preceded the introduction of certification by the regulators. The gate keeping function came after thousands were already inside. This presented a problem of vested interests.