Who Really Benefits When You Buy a Financial Product?

The bank visit

Nirmala, a 40-year-old living in Kurunegala, wanted to start investing her savings for a better return. She'd read online about Unit Trusts — a pool of money managed by experts to grow your wealth — and wanted to open one.

Since her local bank branch was her most trusted place for money matters, she walked in and asked the manager how to invest.

Here's the catch: regular bank branches in Sri Lanka do not sell Unit Trusts over the counter. If you want one, you usually have to go directly to a licensed asset management company, or use a digital wealth platform.

But the manager didn't tell Nirmala that. Instead, he immediately started pitching a "savings-linked" life insurance policy — one that promised to return her money with some interest, plus a life cover on the side. When she politely said she only wanted a simple investment, the manager frowned and kept pushing the policy.

The hidden incentive

Why would he push insurance instead of just pointing Nirmala in the right investment direction?

Massive commissions.

Banks in Sri Lanka partner with insurance companies to sell policies to their customers. The commission the bank and the manager earn on a policy is huge — often a large percentage of your entire first-year payment.

Because the reward is so high, branch staff are heavily incentivised to push these policies to hit their targets, even when you walked in asking for a completely different product.

Insurance itself is not the villain here. Basic life and health cover is essential protection — we've written about why you shouldn't cancel it even when you're wealthy. The trap is when expensive insurance products are disguised and sold as investments.

How to protect yourself

If you ask a barber whether you need a haircut, he'll say yes. If you ask a bank manager for investment advice, they'll likely sell you the product that earns them the highest commission. Here's how to spot bad advice before it costs you:

• Ask direct questions. Never hesitate to ask, "Do you earn a commission if I buy this?" Transparency is the most important part of managing your money.
• Separate insurance from investments. Insurance is meant to protect your family if something goes wrong. Investments are meant to grow your wealth. Mixing the two usually results in high fees and low returns.
• Do your own research. Today you don't need a middleman to start growing your money — you can open investments and manage your savings directly from your phone.

The bottom line

Nirmala's story ends well because she didn't need the branch at all. She went home, did a bit more research on her phone, and opened a Unit Trust through a digital app — no salesperson, no friction.

That's exactly why we built Kiwi Money: to help you take control of your money straight from your phone, with no commission-driven pitch standing between you and your goals. If you're just getting started, our 3-Fund Guide to Investing Your Savings is the perfect place to begin.

There is no free lunch. Even when you're the one paying for the meal, it's your responsibility to make sure you get the food you actually ordered — not just the dish the waiter gets a bonus for selling.