It’s been a trying month for the Canadian financial services industry. First came the news that employees at the big banks felt pressured to break the law in order to meet sales targets and then, last week, CBC published a story about an investor who felt ‘duped’ by an RBC advisor. With unfavourable stories seeming to hit the news with increased regularity, Canada’s advisory community has been forced further into the spotlight.
For Grant White
, an Investment Advisor at National Bank Financial
, the recent CBC story didn’t come as a surprise. In fact, he believes such a story was overdue. “There’s been more awareness of how the industry works over the last couple of years; it’s a hot topic,” White says. “People are looking at things more closely and if advisors aren’t doing the right things for their clients, then I can see how something like this can come out.”
Although he’s never felt pressured to mislead a client, White has talked to others in the industry who have felt pressured to use products from their own institution even if they're not the best possible solution. White has noticed this sort of activity occurring more at the branch level rather in the wealth management teams. “People need to be aware that the banks are businesses and that their goal is to sell their own products. I don’t necessarily think the banks have done anything wrong from that standpoint,” White says. “At the same time, advisors need to be free to recommend solutions that are in the best interests of their clients not the bank they work for. They need to have the autonomy to use products from various institutions.”
White believes that some of the issues are created by a lack of consumer awareness and thinks that personal finances should play a more significant role in school curriculums. If a client makes an invesment decision they don’t truly understand, it's unlikely that they're going to be completely happy with the results, which may not be the fault of the advisor. “That’s where people can get really hurt; when they use the wrong types of solutions,” White says. “Education around personal finances can alleviate a lot of these issues and help mould the banks into institutions that act in the best interests of clients.”
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