Advisors dismayed at report on banks' sales tactics

The consumer watchdog's study allegedly falls short in uncovering a high-pressure reality

Advisors dismayed at report on banks' sales tactics

When the Financial Consumer Agency of Canada (FCAC) released its findings on business practices at Canada’s big banks last month, it said there were “insufficient” controls to prevent the selling of unsuitable financial products to consumers, and the sales-focused culture at the institutions raise the risk of consumer-protection rules being violated.

But the FCAC stopped short of declaring there was a prevalent problem, instead saying it did not find widespread mis-selling across the banks. That has disappointed various stakeholders who’ve been watching the issue — including some employees at the banks.

“We've been waiting for a year for this report,” a CIBC financial advisor told CBC News recently. “It's very hard, because it doesn't feel accurate.”

The CIBC adviser said that sales pressure eased up briefly after a series of incriminating media reports last year, but eventually returned. She said emails following up on sales numbers now come daily, sometimes twice or thrice in a day. Feeling “desperate,” she said she looks for “gaps” in clients’ finances, extends some clients’ lines of credit, puts others in bank-owned investments when more suitable options are available, and pursues other aggressive means.

In an emailed statement, CIBC spokesperson Caroline Van Hasselt told CBC News: “The actions described are not representative of our culture, which is focused on putting our clients at the centre of all we do.”

An investor rights group was similarly dissatisfied with the FCAC report. Frank Allen, executive director of the Canadian Foundation for Advancement of Investor Rights (FAIR Canada), said it was too general: it didn’t name problem banks nor look into the impact of sales targets, and it provided “vague recommendations” on how banks could improve.

“It's disappointing in the short term,” Allen said. “But hopefully in the long term, it will be a step that advances the interests of bank customers.”

He added that the report illustrates the need for a best-interest standard among banks — a cause that FAIR Canada has long campaigned for. “It would require bank personnel to put the interests of the bank customer first, not just focusing on sales targets,” Allen said.

Speaking to CBC News, FCAC deputy commissioner Brigitte Goulard said she “can understand” why some bank employees, consumers, and advocates might be disappointed. However, the agency could not address many of their concerns because they fall into grey areas.

“Offering higher credit limits to Canadians or extending credit lines or offering more credit cards isn't, per se, illegal," Goulard said. "There are some questions about whether Canadians should have a third or fifth credit card. But that behaviour is not illegal."

Goullard said that the FCAC review revealed instances of possible wrongdoing, which are now being looked into along with 4,500 other consumer complaints sent to the agency from April 2015 to May 2017.


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