You can’t alter reality by denying it exists. That’s the lesson that Canada’s biggest banks should be learning this year – from their own employees, no less.
The reality check arrived in an escalating exposé on CBC News’ “Go Public” forum. It began with a March 6 piece, in which three TD Bank Group employees spoke out about the “incredible pressure” they were under to push useless products on unsuspecting customers.
Three unhappy employees does not a damning condemnation make. But then the dam broke. By March 15, Go Public had been inundated with almost 1,000 emails from bank employees across Canada and at all five big banks. “We are all doing it,” was the gist of the next piece.
So the banks promptly and profusely apologized and began making immediate amends, right?
Not exactly. CTV News picked up the story on March 30, after TD’s CEO Bharat Masrani addressed the issue at an annual shareholder’s meeting. CTV reported: “[Masrani] has been speaking with TD employees across the country since the report came out and he doesn’t believe that the problem is pervasive.”
So, even with the truth exposed, bank leaders seem more interested in denial, status quo and happy shareholders. This, despite the fact that, for years, I and my fellow independent advisors have been witnessing what happens to investors served by commission-based and incentive driven banking industry sales forces.
Impressive but misleading titles
Another issue tackled by CBC News is the common practice of bestowing “impressive but misleading titles” on employees that are really just salespeople.
During my time working for the big firms on Bay Street, I witnessed first hand how VP titles were given away to anyone who made money for the firm … regardless of whether their clients ever saw a dime. Those titles were like that set of steak knives Alec Baldwin touted in this clip from the classic film “Glengarry Glen Ross.” (Note: There is a bit of profanity in this clip.)
Will things change now that the big, fat cat is out of the bag? The Financial Consumer Agency of Canada plans to investigate the accusations, and there have been additional calls for a parliamentary inquiry. I hope to be proven wrong, but I’m personally afraid these inquiries, too, shall pass, with little to show for them.
Or, who knows, maybe things will improve. For now, I recommend sticking with an independent, fee-based financial professional who is under zero pressure to achieve any goals beyond the ones you’ve got in mind for yourself and your family.