A review of one adviser's last 50 client switches finds 70% went into the product paying 1.2% against alternatives paying 0.4%, on Rs 40 crore moved. What is the extra annual cost to clients, and which switches need a suitability check?

The pattern costs clients about Rs 22.4 lakh a year, and it is almost certainly not chance. Rs 28 crore sits in a product costing 0.8 points more than the alternatives. Against the desk's own 35% habit, 35 of 50 switches has well under a one in a million chance of happening at random. Review first the 9 switches that paid exit loads to leave a similar fund, then the 10 older or conservative clients moved into 60% equity.

Price the gap, not the product. Think of a pharmacist who hands out the branded medicine when a generic does the same job: the harm is the price difference on the prescriptions he steered, not the price of every medicine he sold. The client cost of steering is the fee gap multiplied by the money that was steered, Rs 28 crore times 0.8 points, which is Rs 22.4 lakh a year. Left alone for five years that is about Rs 1.12 crore before any compounding, paid by clients for no difference in what they own. The fee here sits inside the expense ratioThe annual cost of a fund, deducted from its assets every day, so the investor sees it only as a lower return., so no client ever sees a bill for it.

Use the desk as the benchmark. If this adviser chose like everyone else, you would expect 35% of 50, about 17 or 18 switches, into the product. He made 35. If each switch had a 35% chance of landing in the product, the chance of 35 or more out of 50 is about 5 in ten million. That does not prove misconduct. A book of clients who genuinely suit a multi-asset fund would also skew the numbers, which is why the next step is to read the files rather than to conclude.

Rank by harm that has already happened, then by harm that could happen. Group A comes first because those clients paid a 1% exit load, about Rs 8 lakh, and possibly capital gains tax, to move from one multi-asset fund to another that costs more. That switch is hard to defend on any suitability ground. Group B comes second: moving a conservative or older client into a fund that is 60% equity is a risk mismatch whatever the fee. Group C is sampled, a quarter of the files, to test whether the documented reasons hold up.

Close with what the bank does next, not a verdict. Contact the Group A clients, refund loads where the switch fails a suitability test, and move the adviser's future switches into the product onto a second sign-off for a period. A strong answer adds the structural point: while the product pays three times the alternative, the next adviser faces the same pull.