The recent story about TD employees feeling pressured to break the law in order to meet sales targets and keep their jobs has sent shockwaves through the financial services industry. On Friday, the bank posted its biggest loss since 2009 and on Monday, Sarah Bradley, the head of the Ombudsman for Banking Services and Investments, said allegations about aggressive sales tactics by TD Bank
employees raise “serious concerns''.
The news surfaced after a CBC investigation revealed that TD employees admitted to willingly misleading their clients. One advisor admitted not acting in her clients’ best interests after being put on a special program because she was not hitting sales goals. "I have invested clients' savings into funds which were not suitable, because of the SR [sales revenue] pressure," the advisor is reported as saying by CBC. "That's very difficult to admit. I didn't do this lightly.”
, an advisor at Millennial Financial Group, was shocked when he first heard the news, but those feelings were replaced as he discussed the story with his colleagues: it started to make sense.
“I’ve always thought that the banks do not necessarily do the best thing for the client; they’re under pressure to hit certain numbers and targets to keep their jobs,” Waxman says. “They’re not true advisors. They’re not able to offer all of the products and services needed to truly meet a client’s needs.”
Waxman says that he’s never felt any pressure to do something illegal or unethical to hit a sales target during his career. Although he has never worked for one of the big banks, Waxman does believe there is a pressure on bank advisors to deliver results rather than provide solid, holistic advice. “They’re bank employees, they’re not true advisors,” Waxman says. “A true advisor is an individual doing the best thing for their client by using the methods available to them. The industry needs better regulations to prevent this sort of thing from happening and there shouldn’t be such stringent targets that make advisors worry about losing their jobs.”
Ultimately, Waxman believes financial firms should shift their focus away from the employees and onto the clients. For any advisor who feels pressure to break the law in order to hit sales revenue targets, Waxman advises they rethink the direction they are headed. “If their real desire is to service the client, that advisor may want to closely look at what they’re doing,” he says.
Ombudsman speaks out on TD Bank allegations
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