A 72-year-old was sold a small cap fund and a five-year close-ended NFO for 80% of her savings. She is down 22% and cannot exit the NFO. Assess suitability, name the failures and propose a remedy.

The sale was unsuitable on every test that matters: horizon, access to money, capacity for loss and concentration, and the aggressive risk profile on file does not match her circumstances. Her Rs 32 lakh is worth about Rs 24.96 lakh, and against deposits it would have stayed in, she is about Rs 9.9 lakh worse off. The remedy is to restore her income first, then compensate the measured shortfall, and fix the process that let the form be signed.

A doctor does not prescribe a drug because it works well on average; she prescribes it because it suits this patient. Suitability is judged against the client's age, horizon, income need and ability to absorb loss, not against the merits of the product. A small cap fund can be a good fund and still be the wrong product for a 72-year-old who lives on her savings. The questions come in order: the time frame, whether she can reach her money, whether she can take a fall, and whether the size of the bet is sensible.

Access and capacity. Before the sale her Rs 40 lakh in deposits at about 7.5% produced roughly Rs 25,000 a month, which covered her need. After it, only Rs 8 lakh still earns interest, about Rs 5,000 a month, so she must sell equity units at a loss to live. The close-ended scheme makes it worse: its exchange listing is thin, so selling usually means accepting a discount to NAV. The aggressive risk profile is the compliance failure behind the rest: it was signed the same day as the sale by a client who had only ever held deposits.

The drop in value is Rs 32 lakh less Rs 24.96 lakh, about Rs 7.04 lakh. The fairer measure compares her position with where suitable advice would have left her. Kept in deposits at 7.5% for 14 months, the Rs 32 lakh would be worth about Rs 34.82 lakh. The shortfall is therefore about Rs 9.9 lakh. Complaint bodies generally think in those terms; confirm the current SEBI complaint route and the distributor's own redress policy before quoting either to her.

Three layers, in order. First, restore her income: move the small cap holding in stages into instruments that match her need, so she is not forced to sell at the worst moment each month. Second, settle the shortfall: the distributor offers compensation measured against the suitable alternative, and if she prefers to keep the close-ended units to maturity, the firm can buy them from her at NAV rather than leave her to the thin exchange market. Third, fix the process: same-day risk profiles for senior clients go to a second reviewer, product commissions on close-ended offers are reviewed, and the relationship manager's other senior-client sales are sampled.

Throughout, keep the dignity rule. Sumitra did what most clients do: she trusted a professional. The report should never read as though she ought to have known better.