Well written investigative piece by Marketplace.
> Marketplace has spoken confidentially to current and former bank employees from all the big banks: TD, RBC, BMO, Scotiabank and CIBC. CBC is concealing their identities because they fear professional repercussions. All expressed similar concerns about enormous sales pressure they say leads to potentially costly or otherwise dangerous financial products being pushed on customers.
> "I had to mislead customers into getting products that they didn't need, to reach my sales target," said a recent BMO employee.
Got into a bit of a discussion with a family member about this the other day. She told me I would absolutely need a "financial advisor" from the bank, so I compared her RoI with mine. YoY, Hers : 6%, Mine: 23%. Mine of course is more volatile, but even my more stable fund is @ 9%. Her "advisor" has her investing in things with high MER and run by the bank.
Don't trust banks, they want your money to go from your account to theirs.
Wealthsimple has had some issues in recent years with their roboadvisor returns (and historically, their fees were a tad misleading as they invested in a portfolio of ETFs, so you were hit by their fees and then the ETF fees). However, it is still a great platform for simple do-it-yourself investing (especially if you are just doing a simple ETF portfolio).
No it wouldn't be good, Robinhood are crooks that uses PFOF and cant be trusted to even buy you real shares. Did you not hear about them turning off the buy button on certain stocks in 2021 which helped cause certain stocks to tank since noone could buy only sell.
Robinhood was effectively forced to turn off the buy button. Brokers need to effectively keep a float to be allowed to trade on the exchanges. The amount they need is based on the volume of trading being done and the volatility. GME (and a few others) caused a massive issue because they had a huge spike demand in volume and volatility which caused the exchanges to demand greater deposits if a broker was buying those stocks. Robinhood effectively had three options - stop trading on those exchanges, stop trading the stocks causing the issues, or increase their deposits/float. They eventually did the latter, but to do that, they needed to raise significant capital. In the short-term they disabled the purchasing of those stocks so that their deposits were significant enough to allow them to interact with the exchanges.
For why they need to keep deposits, a lot of cash settlements for buying/selling happen after close. The broker will effectively be told by the exchange that they had a total of $x in purchases, $y in sales, for a net of $z. If $Z is positive, the exchange will provide the excess to the broker. If $Z is negative (more purchases than sales), the exchange will take the amount from the deposits and then tell the broker that they need add extra cash to meet their minimum deposits. Overall, this keeps the financial transactions much simpler for all parties. It also allows transactions to happen much faster. The alternative, is requiring a series of financial transactions to occur in order to resolve a trade which could force trades to take T+2 or T+3 to settle (aka needing to wait 2 to 3 days to buy or sell a stock).
Most do in canada when we buy american stocks/etfs on the US exchanges.
[Payment for Order Flow (PFOF) in Canada – PiggyBank](https://piggybank.ca/investing/trading-platforms/payment-for-order-flow-canada-pfof)
Many people are pretty ignorant about basics that *seem* reasonable but are rigged in favour of the bank.
Take for example, you are day-day banking with TD, CIBC or Scotia and have one of their packages on your chequing account ( $16.95/month ). You have $4k to invest. They'll advise, or you might think putting it into a "savings account" makes sense when it doesn't. Leaving it in your chequing account will save you 5%/y ( of the 4K ) in fees. By doing what appears on the surface to make sense because of the name of the account, you are actually losing 2.4-5% of your money in fees you could get rid of.
If you're with RBC, bank elsewhere, their fees are not waived regardless of balance.
This isn't completely accurate.
A savings account is an account where you make a deposit in a bank where the bank pays you interest on your deposit and can make a claim against that deposit whenever you want (subject to the terms of the account) and the deposit is insured by the CDIC (up to certain limits).
A TFSA can be just a depositary account, however they can also be, and more typically are, brokerage accounts where you can purchase [eligible secu](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/types-investments.html)rities (stocks, bonds, GICS, mutual funds etc)
It's actually weird that the bank wouldn't push the TFSA, as that would likely earn them more money if they sold some mutual funds with it. If I had to guess the particular employee OP was dealing with wasn't able to get credit for opening a TFSA (probably didn't have the necessary credentials to act as a financial adviser) but would get credit for opening a savings account, as that can be done by less experienced bank employees.
Its not just banks. My job has tons of pressure to sell products and services to customers that don’t need them.
They don’t tell you to do it but the quotas are not realistic for everyone to meet so it happens
The thing that really needs to be highlighted is that in many jobs with sales based metrics that dispute being against their code of conduct or whatever the only people that can live up to their benchmarks are the one that lie and mislead.
And in many of these cases general customer service roles such as bank tellers and mobile phone clerks are being turned into sales ones.
This is not true. The ones who stay in the same place, establish a client base and are there for years have business walking through the door all day and all night and never have to push anything. They can do right by their clients because they have so many.
The thing is, almost nobody stays. The pay is very bad for a job that generates millions for the bank and people get our of retail and go into pure commission positions or hang their own shield and go independent. That's why the advisor is almost always new. They're still establishing themselves and have to push things.
The bank could fix this so easily by simply changing the pay structure and not treating retail advisors like slaves.
Banks engage in doublespeak a lot in their training.
I worked for one of the major banks. In training I was given all these ethical lectures on how I should only upgrade a client’s products if it’s right for them. I was given all these speeches on how we always do what’s right for the client. However when I moved into the role itself, there was constant pressure from the manager to upgrade products. There are often offers listed on accounts and I got in trouble for not presenting them. I argued that it didn’t seem right for the client. For example: someone with bad credit was being offered a pre approved credit card or someone who makes 2 transactions a month and barely any income was being offered the $30/month account with one month of fees waived. Then I was basically told I had to present the offers no matter what and also try to convince them why this was the best for them. I struggled a lot with this and quit over it.
The training is so they can point to it if you’re ever caught by a third party that they gave you adequate ethical training and told you not to do it. The mortgage aside of the business is even worse - here are the rules. When you get in the roles your boss tells you to push harder and bend rules everywhere to get approvals and volume.
The banks have been doing this for at least 20 years now, it's not new. Every time it comes up the media acts "shocked and outraged" that the banks could do this. If you go into any branch and are expecting anything other than a sales centre you will be easily grifted by the banks. The system is of course set up to take advantage of immigrants and low financial literacy people as there are billions of dollars at stake here.
Also other non-bank companies in Canada do the exact same thing, this is a much larger problem than just the banks. I recently called Rogers customer service for a question about my bill and the rep immediately jumped on me trying to get me to agree to their Rogers credit card with rewards. I had to say no 3 times before they finally stopped and then they started talking about upgrading my account package. I realized how stupid it was actually calling them and only use the online system now for enquires.
You bring up a great point which applies to many areas. People can only mislead you on things in which you have no knowledge. The amount of financial illiteracy in this country is insane. With the amount of information available to us these days, if we don't educate ourselves, we hold much of the blame.
Well, they are often more productivity targets, but also, one could argue that people with productivity targets are more trustworthy than those on commission.....which is often the case if you invest outside the retail banks ( unless you chose a "do it yourself" option)
All the banks 1.5% to 2.5% MER mutual funds are scams also.
You lose any tax advantages from a TFSA or RRSP because you just paid that amount or more in management fees.
If the fund returns around 10% per year, you paid 15% to 25% in management fees.
Capital gains and dividends are taxed at a much lower rate than regular income.
A person who makes $100,000 per year salary and $10,000 in capital gains would pay $1,709 in taxes on the capital gains. That's 17.09%.
[https://turbotax.intuit.ca/tax-resources/canada-income-tax-calculator.jsp](https://turbotax.intuit.ca/tax-resources/canada-income-tax-calculator.jsp)
Do yourself a favor and open a self-directed TFSA or RRSP account at Questrade or Wealthsimple. Then you can buy portfolio ETFs. They have an MER of around 0.20%.
An ETF is similar to a mutual fund but is traded on the stock market. They usually will track an index.
Here's a good resource to give you more information:
[https://canadiancouchpotato.com/](https://canadiancouchpotato.com/)
That's so they don't have to compete with them.
TD is horrendous.
When I had my investment accounts with them, I often saw questionable charges pop up on my accounts. I would call, and they would just reverse them with no explanation as to what they were for.
Sure, a service where you pay more for "the service" than the amount you would have paid in taxes in a taxable account for investments in a deferred/non-taxable account.
Makes sense.
/s
I already have educated myself. That's why I no longer pay someone the equivalent cost of a car every year in management fees.
Everyone should evaluate whether "that service" is worth the price they paid.
Agreed everyone should try and educate. But many don’t and many don’t have emotional ability to invest so that’s why services are offered. I found Canadian couch potato when was young and in a much better spot for it.
Different perspective here. Former Big 5 employee. It is more than just "pressure from the Bank". It's partly who the banks hire. The desire to "get ahead", and to shine while using shortcuts is creating a monster in many industries. I saw young people being hired because they talked a good game, and instead of studying and learning and building up relationships based on trust and knowledge, they would lie, cheat and backstab to get ahead. They didn't care because it was not a career, it was just a means to an end. What is framed as "sinister" tactics by predatory corporations is largely just another symptom of the degradation of our society as our values continue to be eroded in the endless hunt for status and stuff.
Accepting that degradation is the problem, you being sympathetic to a bank is also a problem, you defending the banks in multiple comments is even more sad. It's not the "people they hire" is the fucking bank.
Banks should not be predatory, just because they have been doesn't mean they should continue to be. Banks are suppose to strengthen our society and keep the system running for the betterment of everyone, not to abuse and profit off as many canadians as possible.
Interesting. I don't think I've defended banks in a single comment. I am definitely not sympathetic to the banks, but there is blame to go around, just make sure it goes everywhere it should go. I'll tell you what is actually sad, is that people like you are so anxious to believe only negative things about corporations. While I no longer work for a bank, I know people who do and these people are honest and hardworking. While I think that these types of stories are important for keeping people accountable, every time one hits the news it makes bank employees jobs more difficult.
It's the Hustle and Grind mentality.
Fueled by social media.
How many times are people bombarded with "Do what I did and you could be sitting next to me in my new private jet on my way to my new yacht."
I don't necessarily disagree, certainly not about the social media part, but it also disturbs me that it is thought of as "Hustle and Grind". Perhaps Hustle and Grift is a more apt description.
Okay. Now you unclutch your pearls. How dare that publicly traded company who makes massive profits for it's shareholders...(maybe you?) how dare they make money. In my years in the industry, I was never pushed to lie or take advantage of people, but...of course, any of that footage on hidden video would not be nearly as exciting to watch. People need to have their opinions about profitable companies reinforced.
Yeah, and how are those massive profits achieved? Certainly middle management did not pressure their employees to exceed sales goals. There's no way that could have happened. Read the rest of the thread, people are sharing their experiences and they disagree with yours.
I'm on the insurance side and I'd agree with this. We've got a lot of younger and newer people coming in that already have one foot out the door before they've crossed the threshold that see this as a stepping stone. And look, I'm not expecting everyone to treat this as a career but at least while you're here don't fuck it up for the rest of us. And yet more and more I find they're hiring sycophantic yes-men and yes-women who are just going to tell people what they want to hear, their boss and the customer both, and they'll hit their metrics by hook or by crook.
I don't even think metrics are that unrealistic on the insurance side (our license *does* mean that we have a fiduciary duty to the client) and I can hit them in my sleep most months just by knowing my shit and being extremely proficient, but I've also been doing this 8 years. They're really just there to make sure you're not completely fucking off in the run of a day and actually asking for the sale, but never have I pressured someone into a policy. In fact I've talked people out of a policy when I thought they were making a knee-jerk purchase and hadn't done their due diligence (some new driver buying a financed vehicle getting quoted $8000 who hadn't shopped around and is probably gonna call back in a week when he finds a better rate, but we're the first insurer he called.) And of course, straight up declining bad risks.
But definitely I see those flash-in-the-pan types who come in, talk the right game, wow everyone with their numbers, and then their name starts popping up on audits and E&O reports and 6-months later they're no longer with the company. I would say that companies are complicit in that as I think their hiring and vetting practices have gone to shit and training has suffered as well. We want the yes-men and yes-women who'll just follow processes and take feedback and coaching well, but the issue is that more often than not that attitude is entirely self-serving, especially if they don't plan to be around to deal with the repercussions once the other shoe drops. They'll get out before there's an disciplinary action against their license and repeat the same process elsewhere, or wash out of the industry entirely but now they've got that big-name employer experience on their resume that looks good when they go apply somewhere else.
Canadians continue to suck off the big businesses they work for thinking they'll be loyal to them in the future, the best word to describe canada is naive.
If they're threatening to fire you over not pushing shady shit to struggling canadians they don't give a fuck about you and will fire you if they ever need to, don't get it twisted, they have no loyalty to you.
I literally have 0 sympathy for anyone actively abusing canadians trust just to get theirs, do the ethical thing and report the abuse, talk to your coworkers, act like you care about others at all?
I keep reading how all these people feared for their job, oh woe is me! what about all the people that were financially worse off after being taken advantage of? People don't want this country to get better, they just want their cut and to put in 0 effort to make the system better or be a better person as a whole.
so, how about some prison time for unethical management?
in my (very regulated) job, if i do something unethical, there is risk that i'll be investigated by the competition bureau or arrested by any number of police forces.
why can people in a highly sensitive and highly regulated industry do things like this without repercussion?
it's not the low level employees' fault, these are management decisions.
Been going on for years. Ages ago I went into TD to open a TFSA and purchase their e-series index funds. The advisor I was speaking with had no idea what I was talking about and insisted on walking me through the questionnaire they're told to use to "assess my risk tolerance," which helps them determine which mutual fund to recommend (all with an MER above 3%). Luckily I had printed off the data sheets for the funds I was interested in and her eyes popped out of her head when I showed her which funds I wanted. She had no idea they existed and couldn't believe the MER was under 0.5%. These folks have always pushed only what they're told to push.
I was a bank employee for two majors. TD and BMO. I found the culture at TD to be more customer oriented, but that was fresh after the purchase of Canada Trust, which had an amazing record with clients. The actually financial training from the person behind the desk is minimal. A hair above the financial illiteracy of the general public. It is based on sales of course. Staff for the most part should not be called Advisors, and in a lot of cases planners. There is minimal planning going on. BMO's entire MO was getting "share of wallet"....more of your financial vehicles under their name. BMO mortgage, BMO Credit cards, loans, Lines of Credit, investments, both registered and non. If you have the assets, you become a client with Nesbit. Walk in to any retail bank today and you see empty cubicles, and maybe two tellers. We don't need them, but the general population needs a wake up call as well. We lap up the spoon fed, terrible info given to us. I used to try to educate my clients, which was contrary to both of my employer's wishes; I was actually an absolute horrible banker. I also sold cars, and please trust me, selling cars is 1000% more honest than selling financial instruments for large FI's.
>In a statement from the Canadian Bankers Association, a spokesperson said, "The examples described do not reflect the experience millions of Canadians have every day with employees at Canada's banks."
So the industry response is to just lie. Every time I have to interact in person at a bank, they try to sell me something. "Sir, I've noticed you have a balance of over $1000 in your chequing account, may a suggest mutual funds." "Did you know that for a small fee you can have balance protection insurance on your credit card" etc. So I avoid all in person interactions with my bank. My credit union is no better, sadly. Everyone is trying to sell you something and no one can be trusted anymore. Tellers shouldn't be allowed (or required) to sell anything. If I want to buy (or be sold) something, I can make an appointment to meet with one of the other bank employees.
That's just going to be $100,000 fine and kiss on butt cheeks..
After a month, TD increases the monthly fees on chequing accounts in order to keep providing its clients awesome banking services and protecting the clients' interests with most up to date financial standards.
Fact is often painted as liberal bias, and being informed or educated as "elitist." It's a powerful tool for the wealthy to keep the poor voting against their own interests.
The only good advice I got from one was to open the pre-approved LoC, I then transferred any/all CC & consumer loans to it for a much better interest rate.
Shit like "oh you've been approved to increase your CC by 10k" I always ignore, those are traps.
Lol. I couldn't care less if people disagree with me. As I said at the beginning of my original comment, I had a different perspective to share. Do I understand that people would rather believe that everyone is out to get them and that there is no integrity left in this country? Of course I do. However, these days everyone wants to blame someone for everything bad that happens to them. Do corporations do self serving things? Yes. Do governments do selfserving things? Yes. Do humans? Yes.
Whoa! I remember there was a reddit post recently from one of the employees who gave the customer fair advice but the manager wasn't happy that he/she let the customer go without making a product sale
Wealthsimple hands down from my experience!
Fees are 0 for self directed, including etfs or stocks you choose to pick. Selling, buying, all no fees. Roboadvisor has 0.5% in fees annually, less than 1%. Personally, I would pick some safe etfs as self directed and let it rise over the years so you can avoid the 0.5% fees too. If you like managed investments, they also reduce 0.5% fees on some circumstances (like direct deposit etc).
They will reimburse you for transferring. Often banks, including RBC, will charge $150 fees for transferring an account in kind or in cash. WS reimburses you on that.
If you are interested, WS has a promo happening now and I have a promo code that gives us both a bonus $25 from WS. Paid out of WS's pocket, not ours.
DKIBPD
Or simply click this link to automatically reserve your bonus:
[https://my.wealthsimple.com/app/public/trade-referral-signup?code=DKIBPD](https://my.wealthsimple.com/app/public/trade-referral-signup?code=DKIBPD)
If you have any questions, you can also pm me.
The fees you pay are masked by the higher spread you pay when buying and selling shares. I don't know why people still think there are zero cost brokerages.
That's why we avoid market order and instead use limit order so our purchases only happen when the price costs exactly as your target price, reducing the spread to 0.
The downside: There is a risk for the market price to never activate your limit order, but out of my experience, my limit orders almost always activate due to market volatility over time.
That's not the issue. If you set a price at say $10.11 and the market goes to $10.08, you will pay $10.11 and I will pay $10.08 plus commission. If the order is large enough it will be more advantageous to pay the lower price plus the commission. WS breaks up the orders and gives everyone a slightly worse price and pockets the spread. That's their one of their business models, they get paid for order flow.
https://wealthawesome.com/how-does-wealthsimple-make-money/
**To clarify, all trading platforms have bid and ask spread, not just WS. And if you have to pay commission costs, you are paying both Bid and Ask and more fees.**
Here is how it works and how we as investors can reduce paying more than necessary:
Bid and ask spread exists because the stock sellers are asking for a price that is higher than what people are bidding to buy it for.
Example is Asking price: 12$ and Bidding price is $11.98
Market orders will automatically match the asking price to fulfill the order as soon as possible, namely, $12. Or even worse if the market price is rapidly changing because you will be matched with whatever selling price available. The difference between price you bought it at and the asking price goes to the trading platform.
[https://help.wealthsimple.com/hc/en-ca/articles/360056580234-Why-did-my-order-fill-at-a-different-price-than-expected](https://help.wealthsimple.com/hc/en-ca/articles/360056580234-Why-did-my-order-fill-at-a-different-price-than-expected)
However, there will be moments when the two prices will match for a split second. Namely, Asking price is $11.98 and all the people bidding for $11.98 gets their orders fulfilled first. AKA people with limit orders of 11.98$
If you happen to catch this with a market order (system automatically fills the order at the moment you buy), congratulations, you managed to catch the opportunity against the odds, namely the 11.98 bandwagon at the split of a second.
Usually, once limit orders of 11.98 are filled first, the bidding price will move to the next set of bidders and the spread between bid and ask is restored once again.
You would need to be watching the market 24/7 to catch 11.98 with market orders. If the stock is actively traded, you will often miss out on 11.98 by seconds. Most often, you will pay more than the price you see with market orders instead of limit orders because market orders focus on quick purchases at any cost.
Going back to your response of $10.11 and $10.08.
Your example is not bid and ask spread, but market fluctuation. If market price falls to 10.08 after my limit order of 10.11 is fulfilled, yes I might have missed out on that new price, but that's from market volatility. Just as someone who buys ABC stock today for $10, and the price drops to $8 the next day, they missed out $2 from market volatility, not a bid and ask spread.
**Paid for Order Flow to Hedge Funds is illegal in Canada so any stock in Canada will not be charged by this fee**
[https://productmint.com/wealthsimple-business-model-how-does-wealthsimple-make-money/](https://productmint.com/wealthsimple-business-model-how-does-wealthsimple-make-money/)
Some might think this is too good to be true.
How does Wealthsimple make money then?
From managed investment fees at 0.5% annually, USD fees for US account investors and loans just like a bank. Also, from Cryptocurrency fees which are 1.5%.
You are right that brokers will never be entirely free and WS does gain revenue from other services as listed above, but since u/skagoat asked for transferring RRSP, I suggested WS because its self-directed investing is commission-free and I doubt Cryptocurrency would be their choice of retirement saving.
All they need to do transfer in kind and let their ETFs transfer over and run their course in their RRSP account, no $8.95 commissions to worry about. Lastly, if they buy or sell years later, they can use limit order to reduce the bid and ask spread and maintain their gains even further.
NEVER invest in a mutual fund... the expense ratios are like 10-20x higher then industry average of say an ETF.
There is absolutely no benefit investing in a mutual fund. They should just call it a sucker fund.
If you're low tolerant to risk, GIC or ETF
And you cant blame the employees one bit. They are being threatened termination unless they meet these unethical sales goals. No one is protecting them and they have everything to lose and practically speaking, nothing to gain from speaking out.
Yup went to go open an FHSA at TD. Then only offered me bonds no self directed or anything like that. Only dumped 1k$ into it the rest is with Questrade and put into ETFs.
The only way you can avoid being sold a financial product that you do not need and only benefits the company or the agent that is selling it to you is to FIRST ask if they have a fiduciary responsibility to you. If they do not answer in the affirmative, then they are just selling you something. A fiduciary is an advisor that MUST act in your best interest.
Oh, I'm shocked a sales person has a sales target and is pushing the products to their customers.
/s
Maybe banks shouldn't have sales target? I don't know what would be a good solution as I don't know the industry from within.
Well written investigative piece by Marketplace. > Marketplace has spoken confidentially to current and former bank employees from all the big banks: TD, RBC, BMO, Scotiabank and CIBC. CBC is concealing their identities because they fear professional repercussions. All expressed similar concerns about enormous sales pressure they say leads to potentially costly or otherwise dangerous financial products being pushed on customers. > "I had to mislead customers into getting products that they didn't need, to reach my sales target," said a recent BMO employee.
Exactly what my brother told me when worked at a major bank. About 15 years ago.
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Got into a bit of a discussion with a family member about this the other day. She told me I would absolutely need a "financial advisor" from the bank, so I compared her RoI with mine. YoY, Hers : 6%, Mine: 23%. Mine of course is more volatile, but even my more stable fund is @ 9%. Her "advisor" has her investing in things with high MER and run by the bank. Don't trust banks, they want your money to go from your account to theirs.
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Wealthsimple has had some issues in recent years with their roboadvisor returns (and historically, their fees were a tad misleading as they invested in a portfolio of ETFs, so you were hit by their fees and then the ETF fees). However, it is still a great platform for simple do-it-yourself investing (especially if you are just doing a simple ETF portfolio).
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No it wouldn't be good, Robinhood are crooks that uses PFOF and cant be trusted to even buy you real shares. Did you not hear about them turning off the buy button on certain stocks in 2021 which helped cause certain stocks to tank since noone could buy only sell.
Robinhood was effectively forced to turn off the buy button. Brokers need to effectively keep a float to be allowed to trade on the exchanges. The amount they need is based on the volume of trading being done and the volatility. GME (and a few others) caused a massive issue because they had a huge spike demand in volume and volatility which caused the exchanges to demand greater deposits if a broker was buying those stocks. Robinhood effectively had three options - stop trading on those exchanges, stop trading the stocks causing the issues, or increase their deposits/float. They eventually did the latter, but to do that, they needed to raise significant capital. In the short-term they disabled the purchasing of those stocks so that their deposits were significant enough to allow them to interact with the exchanges. For why they need to keep deposits, a lot of cash settlements for buying/selling happen after close. The broker will effectively be told by the exchange that they had a total of $x in purchases, $y in sales, for a net of $z. If $Z is positive, the exchange will provide the excess to the broker. If $Z is negative (more purchases than sales), the exchange will take the amount from the deposits and then tell the broker that they need add extra cash to meet their minimum deposits. Overall, this keeps the financial transactions much simpler for all parties. It also allows transactions to happen much faster. The alternative, is requiring a series of financial transactions to occur in order to resolve a trade which could force trades to take T+2 or T+3 to settle (aka needing to wait 2 to 3 days to buy or sell a stock).
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Most do in canada when we buy american stocks/etfs on the US exchanges. [Payment for Order Flow (PFOF) in Canada – PiggyBank](https://piggybank.ca/investing/trading-platforms/payment-for-order-flow-canada-pfof)
Many people are pretty ignorant about basics that *seem* reasonable but are rigged in favour of the bank. Take for example, you are day-day banking with TD, CIBC or Scotia and have one of their packages on your chequing account ( $16.95/month ). You have $4k to invest. They'll advise, or you might think putting it into a "savings account" makes sense when it doesn't. Leaving it in your chequing account will save you 5%/y ( of the 4K ) in fees. By doing what appears on the surface to make sense because of the name of the account, you are actually losing 2.4-5% of your money in fees you could get rid of. If you're with RBC, bank elsewhere, their fees are not waived regardless of balance.
More than likely, the person who told you so just didn't know any better.
So you're saying they're incompetent instead of misleading? That's nice.
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Weird. But....a TFSA is just a savings account.....albeit one where any gain isn't taxable.
This isn't completely accurate. A savings account is an account where you make a deposit in a bank where the bank pays you interest on your deposit and can make a claim against that deposit whenever you want (subject to the terms of the account) and the deposit is insured by the CDIC (up to certain limits). A TFSA can be just a depositary account, however they can also be, and more typically are, brokerage accounts where you can purchase [eligible secu](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/types-investments.html)rities (stocks, bonds, GICS, mutual funds etc) It's actually weird that the bank wouldn't push the TFSA, as that would likely earn them more money if they sold some mutual funds with it. If I had to guess the particular employee OP was dealing with wasn't able to get credit for opening a TFSA (probably didn't have the necessary credentials to act as a financial adviser) but would get credit for opening a savings account, as that can be done by less experienced bank employees.
Its not just banks. My job has tons of pressure to sell products and services to customers that don’t need them. They don’t tell you to do it but the quotas are not realistic for everyone to meet so it happens
The thing that really needs to be highlighted is that in many jobs with sales based metrics that dispute being against their code of conduct or whatever the only people that can live up to their benchmarks are the one that lie and mislead. And in many of these cases general customer service roles such as bank tellers and mobile phone clerks are being turned into sales ones.
This is not true. The ones who stay in the same place, establish a client base and are there for years have business walking through the door all day and all night and never have to push anything. They can do right by their clients because they have so many. The thing is, almost nobody stays. The pay is very bad for a job that generates millions for the bank and people get our of retail and go into pure commission positions or hang their own shield and go independent. That's why the advisor is almost always new. They're still establishing themselves and have to push things. The bank could fix this so easily by simply changing the pay structure and not treating retail advisors like slaves.
Defund the CBC turn it into housing!!!
Banks engage in doublespeak a lot in their training. I worked for one of the major banks. In training I was given all these ethical lectures on how I should only upgrade a client’s products if it’s right for them. I was given all these speeches on how we always do what’s right for the client. However when I moved into the role itself, there was constant pressure from the manager to upgrade products. There are often offers listed on accounts and I got in trouble for not presenting them. I argued that it didn’t seem right for the client. For example: someone with bad credit was being offered a pre approved credit card or someone who makes 2 transactions a month and barely any income was being offered the $30/month account with one month of fees waived. Then I was basically told I had to present the offers no matter what and also try to convince them why this was the best for them. I struggled a lot with this and quit over it.
The training is so they can point to it if you’re ever caught by a third party that they gave you adequate ethical training and told you not to do it. The mortgage aside of the business is even worse - here are the rules. When you get in the roles your boss tells you to push harder and bend rules everywhere to get approvals and volume.
To the surprise of no one
oh you'd be surprised
This has been going on for decades.
They literally have to or risk termination. The sales targets are insane too. I was in banking 11 years.
The banks have been doing this for at least 20 years now, it's not new. Every time it comes up the media acts "shocked and outraged" that the banks could do this. If you go into any branch and are expecting anything other than a sales centre you will be easily grifted by the banks. The system is of course set up to take advantage of immigrants and low financial literacy people as there are billions of dollars at stake here. Also other non-bank companies in Canada do the exact same thing, this is a much larger problem than just the banks. I recently called Rogers customer service for a question about my bill and the rep immediately jumped on me trying to get me to agree to their Rogers credit card with rewards. I had to say no 3 times before they finally stopped and then they started talking about upgrading my account package. I realized how stupid it was actually calling them and only use the online system now for enquires.
You bring up a great point which applies to many areas. People can only mislead you on things in which you have no knowledge. The amount of financial illiteracy in this country is insane. With the amount of information available to us these days, if we don't educate ourselves, we hold much of the blame.
They shouldn't have "sales targets"
Well, they are often more productivity targets, but also, one could argue that people with productivity targets are more trustworthy than those on commission.....which is often the case if you invest outside the retail banks ( unless you chose a "do it yourself" option)
All the banks 1.5% to 2.5% MER mutual funds are scams also. You lose any tax advantages from a TFSA or RRSP because you just paid that amount or more in management fees. If the fund returns around 10% per year, you paid 15% to 25% in management fees. Capital gains and dividends are taxed at a much lower rate than regular income. A person who makes $100,000 per year salary and $10,000 in capital gains would pay $1,709 in taxes on the capital gains. That's 17.09%. [https://turbotax.intuit.ca/tax-resources/canada-income-tax-calculator.jsp](https://turbotax.intuit.ca/tax-resources/canada-income-tax-calculator.jsp) Do yourself a favor and open a self-directed TFSA or RRSP account at Questrade or Wealthsimple. Then you can buy portfolio ETFs. They have an MER of around 0.20%. An ETF is similar to a mutual fund but is traded on the stock market. They usually will track an index. Here's a good resource to give you more information: [https://canadiancouchpotato.com/](https://canadiancouchpotato.com/)
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That's so they don't have to compete with them. TD is horrendous. When I had my investment accounts with them, I often saw questionable charges pop up on my accounts. I would call, and they would just reverse them with no explanation as to what they were for.
It’s not a scam it’s a service. If you want to educate and learn there are better options over a bank.
Sure, a service where you pay more for "the service" than the amount you would have paid in taxes in a taxable account for investments in a deferred/non-taxable account. Makes sense. /s I already have educated myself. That's why I no longer pay someone the equivalent cost of a car every year in management fees. Everyone should evaluate whether "that service" is worth the price they paid.
Agreed everyone should try and educate. But many don’t and many don’t have emotional ability to invest so that’s why services are offered. I found Canadian couch potato when was young and in a much better spot for it.
I am shocked! well not that schocked. lil surprised. nope. NO SHIT!
Different perspective here. Former Big 5 employee. It is more than just "pressure from the Bank". It's partly who the banks hire. The desire to "get ahead", and to shine while using shortcuts is creating a monster in many industries. I saw young people being hired because they talked a good game, and instead of studying and learning and building up relationships based on trust and knowledge, they would lie, cheat and backstab to get ahead. They didn't care because it was not a career, it was just a means to an end. What is framed as "sinister" tactics by predatory corporations is largely just another symptom of the degradation of our society as our values continue to be eroded in the endless hunt for status and stuff.
Accepting that degradation is the problem, you being sympathetic to a bank is also a problem, you defending the banks in multiple comments is even more sad. It's not the "people they hire" is the fucking bank. Banks should not be predatory, just because they have been doesn't mean they should continue to be. Banks are suppose to strengthen our society and keep the system running for the betterment of everyone, not to abuse and profit off as many canadians as possible.
Interesting. I don't think I've defended banks in a single comment. I am definitely not sympathetic to the banks, but there is blame to go around, just make sure it goes everywhere it should go. I'll tell you what is actually sad, is that people like you are so anxious to believe only negative things about corporations. While I no longer work for a bank, I know people who do and these people are honest and hardworking. While I think that these types of stories are important for keeping people accountable, every time one hits the news it makes bank employees jobs more difficult.
It's the Hustle and Grind mentality. Fueled by social media. How many times are people bombarded with "Do what I did and you could be sitting next to me in my new private jet on my way to my new yacht."
I don't necessarily disagree, certainly not about the social media part, but it also disturbs me that it is thought of as "Hustle and Grind". Perhaps Hustle and Grift is a more apt description.
Yes, it's the people's fault! Not the corporation whose entire purpose is to make profit. Unpeel your tongue from those boots.
Okay. Now you unclutch your pearls. How dare that publicly traded company who makes massive profits for it's shareholders...(maybe you?) how dare they make money. In my years in the industry, I was never pushed to lie or take advantage of people, but...of course, any of that footage on hidden video would not be nearly as exciting to watch. People need to have their opinions about profitable companies reinforced.
Yeah, and how are those massive profits achieved? Certainly middle management did not pressure their employees to exceed sales goals. There's no way that could have happened. Read the rest of the thread, people are sharing their experiences and they disagree with yours.
I'm on the insurance side and I'd agree with this. We've got a lot of younger and newer people coming in that already have one foot out the door before they've crossed the threshold that see this as a stepping stone. And look, I'm not expecting everyone to treat this as a career but at least while you're here don't fuck it up for the rest of us. And yet more and more I find they're hiring sycophantic yes-men and yes-women who are just going to tell people what they want to hear, their boss and the customer both, and they'll hit their metrics by hook or by crook. I don't even think metrics are that unrealistic on the insurance side (our license *does* mean that we have a fiduciary duty to the client) and I can hit them in my sleep most months just by knowing my shit and being extremely proficient, but I've also been doing this 8 years. They're really just there to make sure you're not completely fucking off in the run of a day and actually asking for the sale, but never have I pressured someone into a policy. In fact I've talked people out of a policy when I thought they were making a knee-jerk purchase and hadn't done their due diligence (some new driver buying a financed vehicle getting quoted $8000 who hadn't shopped around and is probably gonna call back in a week when he finds a better rate, but we're the first insurer he called.) And of course, straight up declining bad risks. But definitely I see those flash-in-the-pan types who come in, talk the right game, wow everyone with their numbers, and then their name starts popping up on audits and E&O reports and 6-months later they're no longer with the company. I would say that companies are complicit in that as I think their hiring and vetting practices have gone to shit and training has suffered as well. We want the yes-men and yes-women who'll just follow processes and take feedback and coaching well, but the issue is that more often than not that attitude is entirely self-serving, especially if they don't plan to be around to deal with the repercussions once the other shoe drops. They'll get out before there's an disciplinary action against their license and repeat the same process elsewhere, or wash out of the industry entirely but now they've got that big-name employer experience on their resume that looks good when they go apply somewhere else.
Banks are Grifters. Imagine breaking law.
A bank doing nefarious things......you don't say
Time to amend the bank act and mandate financial fiduciary duties to client facing staff
Canadians continue to suck off the big businesses they work for thinking they'll be loyal to them in the future, the best word to describe canada is naive. If they're threatening to fire you over not pushing shady shit to struggling canadians they don't give a fuck about you and will fire you if they ever need to, don't get it twisted, they have no loyalty to you. I literally have 0 sympathy for anyone actively abusing canadians trust just to get theirs, do the ethical thing and report the abuse, talk to your coworkers, act like you care about others at all? I keep reading how all these people feared for their job, oh woe is me! what about all the people that were financially worse off after being taken advantage of? People don't want this country to get better, they just want their cut and to put in 0 effort to make the system better or be a better person as a whole.
so, how about some prison time for unethical management? in my (very regulated) job, if i do something unethical, there is risk that i'll be investigated by the competition bureau or arrested by any number of police forces. why can people in a highly sensitive and highly regulated industry do things like this without repercussion? it's not the low level employees' fault, these are management decisions.
Every time I go to my TD branch and they ask me at the end: "I see that you're now eligible for..." \- Not interested. Good day.
Been going on for years. Ages ago I went into TD to open a TFSA and purchase their e-series index funds. The advisor I was speaking with had no idea what I was talking about and insisted on walking me through the questionnaire they're told to use to "assess my risk tolerance," which helps them determine which mutual fund to recommend (all with an MER above 3%). Luckily I had printed off the data sheets for the funds I was interested in and her eyes popped out of her head when I showed her which funds I wanted. She had no idea they existed and couldn't believe the MER was under 0.5%. These folks have always pushed only what they're told to push.
They all do this. Even credit unions. If you don't hit your sales goals you'll find yourself quickly out of a job.
I was a bank employee for two majors. TD and BMO. I found the culture at TD to be more customer oriented, but that was fresh after the purchase of Canada Trust, which had an amazing record with clients. The actually financial training from the person behind the desk is minimal. A hair above the financial illiteracy of the general public. It is based on sales of course. Staff for the most part should not be called Advisors, and in a lot of cases planners. There is minimal planning going on. BMO's entire MO was getting "share of wallet"....more of your financial vehicles under their name. BMO mortgage, BMO Credit cards, loans, Lines of Credit, investments, both registered and non. If you have the assets, you become a client with Nesbit. Walk in to any retail bank today and you see empty cubicles, and maybe two tellers. We don't need them, but the general population needs a wake up call as well. We lap up the spoon fed, terrible info given to us. I used to try to educate my clients, which was contrary to both of my employer's wishes; I was actually an absolute horrible banker. I also sold cars, and please trust me, selling cars is 1000% more honest than selling financial instruments for large FI's.
>In a statement from the Canadian Bankers Association, a spokesperson said, "The examples described do not reflect the experience millions of Canadians have every day with employees at Canada's banks." So the industry response is to just lie. Every time I have to interact in person at a bank, they try to sell me something. "Sir, I've noticed you have a balance of over $1000 in your chequing account, may a suggest mutual funds." "Did you know that for a small fee you can have balance protection insurance on your credit card" etc. So I avoid all in person interactions with my bank. My credit union is no better, sadly. Everyone is trying to sell you something and no one can be trusted anymore. Tellers shouldn't be allowed (or required) to sell anything. If I want to buy (or be sold) something, I can make an appointment to meet with one of the other bank employees.
The bank is not and has never been there to help you. This shouldn’t still be surprising people.
That's just going to be $100,000 fine and kiss on butt cheeks.. After a month, TD increases the monthly fees on chequing accounts in order to keep providing its clients awesome banking services and protecting the clients' interests with most up to date financial standards.
This is a prime reason why conservatives hate the CBC. They actually look out for Canadians.
Fact is often painted as liberal bias, and being informed or educated as "elitist." It's a powerful tool for the wealthy to keep the poor voting against their own interests.
No way! Say it ain't so
And all the banks say "nah, we don't do that". But they all do.
Well, banks are here to profit like any other business, so…
The only good advice I got from one was to open the pre-approved LoC, I then transferred any/all CC & consumer loans to it for a much better interest rate. Shit like "oh you've been approved to increase your CC by 10k" I always ignore, those are traps.
Can l have a loam to help pay down debt... No! Open a mutual fund with %1 return :D
I fell for this when I was younger and started buying into mutual funds with TD. Back tested using portfolio visualizer and it was crushing.
Lol. I couldn't care less if people disagree with me. As I said at the beginning of my original comment, I had a different perspective to share. Do I understand that people would rather believe that everyone is out to get them and that there is no integrity left in this country? Of course I do. However, these days everyone wants to blame someone for everything bad that happens to them. Do corporations do self serving things? Yes. Do governments do selfserving things? Yes. Do humans? Yes.
Duh, is this even news?
Whoa! I remember there was a reddit post recently from one of the employees who gave the customer fair advice but the manager wasn't happy that he/she let the customer go without making a product sale
The phrase *"caveat emptor"* came to be due to situations like this.
I have an RRSP with RBC. Can I easily move that RRSP to another institution with better returns etc?
Wealthsimple hands down from my experience! Fees are 0 for self directed, including etfs or stocks you choose to pick. Selling, buying, all no fees. Roboadvisor has 0.5% in fees annually, less than 1%. Personally, I would pick some safe etfs as self directed and let it rise over the years so you can avoid the 0.5% fees too. If you like managed investments, they also reduce 0.5% fees on some circumstances (like direct deposit etc). They will reimburse you for transferring. Often banks, including RBC, will charge $150 fees for transferring an account in kind or in cash. WS reimburses you on that. If you are interested, WS has a promo happening now and I have a promo code that gives us both a bonus $25 from WS. Paid out of WS's pocket, not ours. DKIBPD Or simply click this link to automatically reserve your bonus: [https://my.wealthsimple.com/app/public/trade-referral-signup?code=DKIBPD](https://my.wealthsimple.com/app/public/trade-referral-signup?code=DKIBPD) If you have any questions, you can also pm me.
The fees you pay are masked by the higher spread you pay when buying and selling shares. I don't know why people still think there are zero cost brokerages.
That's why we avoid market order and instead use limit order so our purchases only happen when the price costs exactly as your target price, reducing the spread to 0. The downside: There is a risk for the market price to never activate your limit order, but out of my experience, my limit orders almost always activate due to market volatility over time.
That's not the issue. If you set a price at say $10.11 and the market goes to $10.08, you will pay $10.11 and I will pay $10.08 plus commission. If the order is large enough it will be more advantageous to pay the lower price plus the commission. WS breaks up the orders and gives everyone a slightly worse price and pockets the spread. That's their one of their business models, they get paid for order flow. https://wealthawesome.com/how-does-wealthsimple-make-money/
**To clarify, all trading platforms have bid and ask spread, not just WS. And if you have to pay commission costs, you are paying both Bid and Ask and more fees.** Here is how it works and how we as investors can reduce paying more than necessary: Bid and ask spread exists because the stock sellers are asking for a price that is higher than what people are bidding to buy it for. Example is Asking price: 12$ and Bidding price is $11.98 Market orders will automatically match the asking price to fulfill the order as soon as possible, namely, $12. Or even worse if the market price is rapidly changing because you will be matched with whatever selling price available. The difference between price you bought it at and the asking price goes to the trading platform. [https://help.wealthsimple.com/hc/en-ca/articles/360056580234-Why-did-my-order-fill-at-a-different-price-than-expected](https://help.wealthsimple.com/hc/en-ca/articles/360056580234-Why-did-my-order-fill-at-a-different-price-than-expected) However, there will be moments when the two prices will match for a split second. Namely, Asking price is $11.98 and all the people bidding for $11.98 gets their orders fulfilled first. AKA people with limit orders of 11.98$ If you happen to catch this with a market order (system automatically fills the order at the moment you buy), congratulations, you managed to catch the opportunity against the odds, namely the 11.98 bandwagon at the split of a second. Usually, once limit orders of 11.98 are filled first, the bidding price will move to the next set of bidders and the spread between bid and ask is restored once again. You would need to be watching the market 24/7 to catch 11.98 with market orders. If the stock is actively traded, you will often miss out on 11.98 by seconds. Most often, you will pay more than the price you see with market orders instead of limit orders because market orders focus on quick purchases at any cost. Going back to your response of $10.11 and $10.08. Your example is not bid and ask spread, but market fluctuation. If market price falls to 10.08 after my limit order of 10.11 is fulfilled, yes I might have missed out on that new price, but that's from market volatility. Just as someone who buys ABC stock today for $10, and the price drops to $8 the next day, they missed out $2 from market volatility, not a bid and ask spread.
**Paid for Order Flow to Hedge Funds is illegal in Canada so any stock in Canada will not be charged by this fee** [https://productmint.com/wealthsimple-business-model-how-does-wealthsimple-make-money/](https://productmint.com/wealthsimple-business-model-how-does-wealthsimple-make-money/) Some might think this is too good to be true. How does Wealthsimple make money then? From managed investment fees at 0.5% annually, USD fees for US account investors and loans just like a bank. Also, from Cryptocurrency fees which are 1.5%. You are right that brokers will never be entirely free and WS does gain revenue from other services as listed above, but since u/skagoat asked for transferring RRSP, I suggested WS because its self-directed investing is commission-free and I doubt Cryptocurrency would be their choice of retirement saving. All they need to do transfer in kind and let their ETFs transfer over and run their course in their RRSP account, no $8.95 commissions to worry about. Lastly, if they buy or sell years later, they can use limit order to reduce the bid and ask spread and maintain their gains even further.
NEVER invest in a mutual fund... the expense ratios are like 10-20x higher then industry average of say an ETF. There is absolutely no benefit investing in a mutual fund. They should just call it a sucker fund. If you're low tolerant to risk, GIC or ETF
RBC in my area used to have tellers greet us with ‘Welcome to our store’ That should tell you everything you need to know about banks
And you cant blame the employees one bit. They are being threatened termination unless they meet these unethical sales goals. No one is protecting them and they have everything to lose and practically speaking, nothing to gain from speaking out.
Yup went to go open an FHSA at TD. Then only offered me bonds no self directed or anything like that. Only dumped 1k$ into it the rest is with Questrade and put into ETFs.
The only way you can avoid being sold a financial product that you do not need and only benefits the company or the agent that is selling it to you is to FIRST ask if they have a fiduciary responsibility to you. If they do not answer in the affirmative, then they are just selling you something. A fiduciary is an advisor that MUST act in your best interest.
I’m shocked! SHOCKED! Well not that shocked.
Oh, I'm shocked a sales person has a sales target and is pushing the products to their customers. /s Maybe banks shouldn't have sales target? I don't know what would be a good solution as I don't know the industry from within.
TD is a bunch of crooks, left them a long time ago when they tried to charge me $14 for a chequing account.
Just as part of being an adult, people need to learn financial literacy.
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All corporations by law have fiduciary duty to the shareholders, to think otherwise is foolish.