In a world of flashy promises, cautious decision-making is the true path to financial safety
When it comes to buying financial products, trust can be a costly luxury. That is the unvarnished truth offered by Dhirendra Kumar in his searing critique of the modern financial services industry. Drawing on decades of experience observing banks, insurers, and investment firms, Kumar lays bare the mechanics of an industry where the customer’s caution, not confidence, is their most valuable asset.
“When I encounter someone who’s been sold an overpriced insurance policy or a questionable mutual fund, I’m reminded of a simple truth: in financial services, the best way to get what you deserve is to assume the other party doesn’t deserve your trust,” Kumar writes. While such advice may seem cynical, he argues, it is in fact a necessary survival tool in an environment riddled with misaligned incentives and product complexity.
Kumar sharply contrasts financial services with other consumer markets, where both buyer and seller can benefit. “While buying a car benefits both you and the automaker, financial services are zero-sum. Every transaction is your money going in and their money coming out,” he states. That reality, he contends, makes scepticism not only advisable, but essential.
His criticism is particularly damning when it comes to cryptocurrency. “The crypto industry represents perhaps the purest distillation of financial misdirection in modern times,” Kumar asserts. He warns that while blockchain is touted as a democratic revolution in finance, the real beneficiaries are early insiders. “The retail investor entering crypto isn’t part of a revolution; they’re providing liquidity for others’ exit strategies.”
Kumar acknowledges that not all financial products are harmful and not all advisors dishonest. Yet he is adamant that structural incentives often steer advice in the wrong direction. “When the person advising you earns more by steering you toward certain products, objectivity becomes the first casualty,” he notes.
In India, this is compounded by regulatory frameworks that favour institutions. Insurance policies beyond term plans and mutual funds launched during market highs, he suggests, are prime examples of products created to benefit sellers more than buyers.
He urges investors to rely on a strategy of elimination: avoid high-cost, opaque products or those with evident conflicts of interest. “It’s generally easier to identify what might go wrong than to predict what will go spectacularly right,” he writes.
Kumar’s guidance to investors is threefold: seek independent education, make autonomous decisions, and embrace simplicity. “When it works, you can replicate it, and when it doesn’t, you can figure out why,” he explains. This mindset, he argues, is not cynical but practical. “Think of it as defensive driving for your money.”
He concludes with a blunt but vital reminder: “Next time someone offers you a ‘once-in-a-lifetime investment opportunity’… verify, then verify again, and only then consider trusting—maybe.”
In a financial world that often places marketing ahead of merit, Kumar’s message is clear: your best defence is a critical mind, not a confident handshake.
