Your banker as your financial planner – Pros and Cons

Further to the previous article (Emergence of banks in India as financial planning outfits), whom should you hand over the task of managing your investments??

Your bank – with whom you have been dealing for  years for your banking transactions and which now has a full-fledged wealth management division too (which they also keep aggressively advertising about every time you visit them).


One of the Wealth Management/Broking firms or independent financial planners who specialize in this area.

Pros and cons of having your bank as your financial planner


  • Higher credibility/accountability The relationship/wealth manager dealing with you represents the organization which has a good brand visibility and is perceived to have more accountability compared to an independent advisor/agent as the client can always approach the organization in case of a problem/grievance.
  • Ease of transacting – The Relationship Manager usually act as a one stop shop for the client and goes an extra mile and even take care of  the banking related issues of the client.
  • Greater comfort level – The client feels more comfortable revealing his financial health to an employee/ representative of the bank with whom he has been banking for a long time.
  • Better logistics support – Financial planning divisions of banks are equipped with a good research team, financial planning tracking software, infrastructure etc. which makes the process simpler and ensures smooth functioning.

Now, the concerns –

  •  Increased competition among banks has resulted in Relationship Managers being given stiff sales targets by their employers due to which they may be forced to be more sales focused than customer focused.
  • They have to function within certain guidelines set by their seniors/ organization which could sometimes come in the way of their exercising their independent professional judgment while working on the client’s portfolio.
  • Most of the financial planning exercise in banks is more person driven than process driven and the client usually looks upon the Relationship Manager  as a trusted advisor .High attrition rates among them, with all banks trying to acquire the best of the lot leads to the clients having to deal with a new relationship manager frequently, causing  customer dissatisfaction.

Have a query/an opinion/a comment to make? Would love to hear it !

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