In the past 7 days, there have been numerous reports from employees of all five of Canada’s largest banks that they have been heavily pressured by management to increase sales, forcing them to use in their opinion, unethical practices. As a result, the federal government has launched an investigation into their business practices.
The banks have responded with statements to say that they act in the best interest of clients. As a matter of fact, there is court precedence regarding this. In Royal Bank of Canada v. Dhupar, 2014, the Court found that the relationship between a bank and its clients is not a fiduciary relationship in which the bank has a responsibility to act in the best interest of its clients. In light of so many employees making these allegations, should it be questioned to believe such statements? A significant difference from a registered portfolio manager, as they are required by law to act only in the best interest of their clients, as a fiduciary.
The safety of our financial services industry is a necessary pillar of our economy. I hope that these troubling situations in turn cause a positive notion for regulators to enact legislation that all financial institutions must act in the best interest of the public. All Canadians deserve transparent and objective advice in a fiduciary environment.
As reported by Erica Johnson of CBC, some of the comments made so far have been:
“Management is down your throat all the time…They want you to hit your numbers and it doesn’t matter how.” – Scotiabank Financial Advisor
“Managers belittle you. We get weekly emails that highlight in red the people who are not hitting those sales targets.” - RBC Certified Financial Planner
“If you weren’t selling, you weren’t worth having around.” – former BMO Financial Services Manager
“We were all doing it.” - RBC Financial Advisor
Read the CBC’s full article by Erica Johnson here.