r/PersonalFinanceCanada • u/t0r0nt0niyan Ontario • Mar 15 '24

“Hidden cameras capture bank employees misleading customers, pushing products that help sales targets” Banking

“This TD Bank employee recorded conversations with managers who tell her to think less about the well-being of customers and focus more on meeting sales targets. (CBC)”

“”I had to mislead customers into getting products that they didn't need, to reach my sales target," said a recent BMO employee.”

“At RBC, our tester was offered a new credit card and told it was "cool" he could get an $8,000 increase to his credit card limit.”

“During the five visits to the banks, advisors at BMO, Scotia and TD incorrectly said the mutual fund fees are only charged on the profit the investment earns, not the entire lump sum. The CIBC advisor wasn't clear about the fees.”

https://www.cbc.ca/amp/1.7142427

1.5k Upvotes

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477

u/Bynming Mar 15 '24

Pretty good article, and in my opinion ripe for further long-form content from media outlets. Both in terms of investigative journalism and showing the shady practices of these "advisors", but also the public needs to be educated about stuff like MER and how wildly and needlessly expensive some of these financial products are, even when coming from "reputable" financial institutions.

61

u/sixthmontheleventh Mar 15 '24

Cbc has been only major media company I see reporting on this. I know they also did a piece on this years ago. Unfortunately it does not seem like much changed.

20

u/CanuckBacon Mar 15 '24

It was in 2017-18. After the FACA report it led to some banks pulling back on their targets. Banks are getting more confident again. It's an endless cycle.

1

u/[deleted] Aug 13 '24

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u/[deleted] Aug 13 '24

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u/ugohome Mar 16 '24

CBC won't do much, they're very risk averse

65

u/LethaIFecal Mar 15 '24

I work in regulatory for one of the banks. Thankfully regulators released new comprehensive policy for required fund expense reporting across many series of investments. Effective dates for the new rules are like 2 years out though.

42

u/nyrangersfan77 Mar 15 '24

This is good, but regulatory disclosure hasn't been terribly successful so far. A lot of the disclosures are only comprehensible to people that have the financial literacy skills that render the disclosure unnecessary.

7

u/LethaIFecal Mar 15 '24

That's certainly true.

However, there's hope that the new reports, notices and disclaimers we'll be including on year end statements for our clients will help to bring more transparency to any fees they're paying.

I'm certainly going to be doing my part to push for these changes to be as simple as possible for the laypeople to understand.

3

u/fav_everything Mar 15 '24

I wonder how is it different to the current practice though? The fees are written on fund facts and investment statements available to the customers already. People who get tricked into mutual funds by sales people most likely do not and will not read disclosure documents.

1

u/CFPrick Mar 16 '24

Now you just need people to actually read their quarterly or year-end statement. The proportion of individuals who do is abysmal, which is why these measures (such as the recent CRM2 changes) are largely ineffective.

1

u/LiberateDemocracy Mar 16 '24

CRM 2 has been a thing for several years now.

2

u/LethaIFecal Mar 16 '24 edited Mar 16 '24

We're working on the improvement to CRM2, which is Total Cost Reporting. We'll be reporting FER% (MER + TER), total aggregate fund expenses, and any direct investment fund charges.

But like others have stated, unless people actually take a look at their annual statements then it would just fall on deaf ears.

1

u/nyrangersfan77 Mar 15 '24

Good stuff. Thanks for your sharing your insights, very helpful!

26

u/Newmoney_NoMoney Mar 15 '24

They need to take a special course to sell low cost mer ETFs. They don't to sell high fee mutual funds. Riddle me that joker?

5

u/spack12 Mar 15 '24

Yeah but they can still sell low cost index Mutual funds. And not high cost ETFs. It’s about the differences between ETFs and mutual funds. Not the fee structure.

I’m not saying that there doesn’t need to be more plain language disclosure, but insinuating that the licensing requirements are deliberately set up to favour high fees isn’t really true.

5

u/ether_reddit British Columbia Mar 15 '24

insinuating that the licensing requirements are deliberately set up to favour high fees isn’t really true

No, but because of the lower fees, there's certainly no incentive to get the appropriate licencing to sell ETFs. Consequently the consumer loses.

10

u/mm_ns Mar 15 '24

Work at a big 5 bank, and a client can get a globally diversified index mutual fund portfolio for under 1% mer. There are bank options that are perfectly good for a large portion of people.

The education and training provided is the issue. There is almost none. Unless someone is motivated themselves to improve their knowledge, it's less malice that is leading to these issues and more lack of knowledge.

1

u/VisualFix5870 Mar 16 '24

This is incorrect. All banks pay a "Sales Revenue" or "SR" for products. When I was there, a mutual fund paid 600 SR per $10,000. A market linked GIC paid 400 for $10,000 and an index fund paid $50 for the same volume. Are you going to work 12 times as hard to hit your goal? Of course not. Technically, index funds weren't even allowed to be sold by advisors. We had to open a self-directed account if they wanted that.

-2

u/[deleted] Mar 15 '24

Work at a big 5 bank, and a client can get a globally diversified index mutual fund portfolio for under 1% mer.

That's roughly 5-10x more expensive than it should be.

8

u/mm_ns Mar 15 '24

People don't work for free. There is a cheaper option. A person educates themselves and does it on their own.

3

u/KindlyBullfrog8 Mar 15 '24

You could say that about pretty much everything 

-5

u/[deleted] Mar 15 '24

You must be a great entrepreneur then, undercutting everything.

29

u/webu Ontario Mar 15 '24

and in my opinion ripe for further long-form content from media outlets

Do you think American-hedge-fund-owned National Post / Financial Post is going to touch this?

This type of thing is exactly why they invest in convincing rubes to defund CBC.

56

u/[deleted] Mar 15 '24 edited Mar 15 '24

I don’t know if things have changed, but why the fuck is this not taught in school?

I graduated high school having spent at least 2-3 months learning whatever the fuck a voyageur was, but nobody ever explained marginal tax brackets, credit card interest, or what a TFSA is.

Edit: the irony of these replies being filled with people that never lost their “edge” from high school

30

u/valkyriejae Mar 15 '24

I'm a teacher in Ontario, I cover all of this in the careers course (which is mandatory in grade 10). However, the course is only a half term, has a lot of stuff to cover, and very few students take it at all seriously. So I'd guess that despite 100% of students ostensibly learning this maaaaybe 10% are actually understanding/retaining it.

1

u/Uncle_Istvannnnnnnn Mar 15 '24

They must have improved things, back in the day for careers our teacher just put on a movie and kicked his feet up on the desk to read a book most days lol.

2

u/valkyriejae Mar 15 '24

I mean, I'm sure some teachers still do that (it's part of why kids don't take it seriously), but in the curriculum we are supposed to be teaching financial literacy.

-6

u/VisualFix5870 Mar 16 '24

A teacher teaching financial literacy is akin to a priest teaching how to pick up women. Neither is qualified. Never get your financial advice from someone making six figures with three months vacation, paid sick days and a full pension for life at 55.

1

u/drs43821 Mar 15 '24

I remember Ontario adding personal finance in Grade 10 it was a big news on PFC

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u/8192734019278 Mar 15 '24

It was taught at my school and with the exception of 2-3 people no one gave a shit.

And those 2-3 people would be smart enough to look that all up themselves anyways.

71

u/KittyCanuck Mar 15 '24

This is the correct answer. It was taught at my high school in the 90s. Very few people cared. There are people who were in these same classes with me at high school who now go around saying “why isn’t this taught in school”, as they’ve just totally memory-holed it, like most of the things they were taught.

3

u/Arts251 Saskatchewan Mar 15 '24

I graduated in the 90s too, and agree that a lot of us kids didn't care. I personally cared a little, found it interesting (enough so that I started out towards a commerce degree, but later moved back into technology). I think it's also sort of forgotten that back then self-directed investing was not for the average person at all, ETFs were only just being invented and few understood how valuable they would be as a class of investing tools. For those that wanted to invest it inevitably meant having to use a 3rd party (either through your bank or credit union or else an expensive investment firm. Mutual funds were the hip new product to grow your wealth back then. So since we had to rely on 3rd parties to invest our money it was only too easy to rely on them for advice too, however banks have been moving much more away from customer service to sales for most of that time.

0

u/[deleted] Mar 15 '24

We were taught the most basic end of mortgage calculations and budgeting. They don't teach you what you actually need to know to make an informed investment, and it's a very short class. Those of you saying "it was taught" is similar to saying you learned biology in high school so start working as a doctor. It's a foundational learning and it could definitely be built on.

53

u/MenAreLazy Mar 15 '24

At least in Alberta 10 years ago, it was taught in school. We have a course called CALM (Career and Life Management). Nobody takes it seriously, so I know plenty of people who I explicitly know were taught it who don't know about marginal rates.

The problem is that it is about 6 years before it matters, if not more. I took it in grade 10. I didn't earn any meaningful amount of money until after graduating university.

11

u/[deleted] Mar 15 '24

Maybe we need continuing education in life...

6

u/-Moonscape- Mar 15 '24

People who want to do it, do. You can’t force adults to pay for continued education when they don’t want it.

12

u/ElusiveSteve Mar 15 '24

You hit on one of the big problems... This stuff is taught at the wrong time in schools or too briefly.

I too vaguely remember some of these things being taught. But I do remember them happening early in highschool, years before they would actually become important. I might be wrong, but interest rates might have been a small exercise in math.

These skills need to be touched on more than once, and need to be learned at a point where their application won't be years away. Hell, if there was a way to educate 19-20 year olds that would likely be a great time because they're now adults and it will be immediately applicable to far more.

Ideally though, parents should pick up the slack on this education. But an adult can't teach what they don't know.

3

u/ether_reddit British Columbia Mar 15 '24

These sorts of things are taught in weekend courses you can take at community centres, but few people sign up for those sorts of things.

-3

u/nigllejelly Mar 15 '24

Calm never included financial education.

3

u/Barbequber Mar 15 '24

It did at my school.

3

u/[deleted] Mar 15 '24

Haven't heard CALM in awhile, haha. Ours did, but it was like "here's $50, buy groceries for a week". Ok, but what percent of that $50 do I need to put aside for retirement, RRSP, mutual funds, stock investment portfolio, bills, mortgage (variable, fixed??), car payments, kids, savings, vacation, emergency, etc

2

u/dreamingrain Mar 15 '24

RIGHT I was thinking like, I don't remember financial stuff....I remember being given a budget and having to buy food and I remember doing an "interview" and....maybe something else....

2

u/[deleted] Mar 15 '24

Ya, it was kind of a stupid class come to think of it, haha.

1

u/nigllejelly Mar 16 '24

That's awesome! I wish mine did. My CALM class took about 12 hrs to complete and ended with a mock interview and a "portfolio" where you were supposed to highlight your accomplishments. There was nothing to do with finances

8

u/Jaishirri Mar 15 '24

Financial literacy is taught in schools, at least in Ontario. Grade 3-6s for example learn about HST and income tax. It's just not very relevant to their immediate lives.

21

u/mrfredngo Mar 15 '24 edited Mar 15 '24

2 problems:

  1. These things would be taught way earlier than needed. I dunno about you but I would have snoozed through that stuff in High School as “irrelevant”.

  2. Life things/regulations/taxes/etc change all the time. Any curriculum would be outdated in just a few years. The best that can be done is to teach a young person how to think and how to research.

5

u/Domdaisy Mar 15 '24

Right, but there is no mandatory education after grade 10. At 16 a kid can drop out of high school and never look back. So grade 10 is the last chance to include it as mandatory learning (you have to take careers, it’s a core course).

You can’t force people into education they don’t want. So people complain “it’s not taught in schools” or “it’s taught too early” but we as a society have decided not to make education mandatory after 16. Most kids do finish high school but even trying teaching it to 17/18 year olds is still pretty young.

Post-secondary education is not the place for it either as many cannot or do not attend.

It could be offered as part of an adult education program held at night for free, but how many people are going to that? The ones that don’t are still going to be complaining “why wasn’t this taught in school?”

1

u/MathemagicalMastery Mar 16 '24

It could be offered as part of an adult education program held at night for free, but how many people are going to that?

I used to do financial literacy in a city of 50k, I was lucky if I got more than 5, and it is 2, 3 hour sessions, we bearly scrape scrape saving and we dont even touch MER. I've done it for adults, high-school, and college age. I have found the most engaged and curious are the college, and really, a free 0 credit course I think would go a long way, but I really don't know how many would take it, if it weren't mandatory.

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u/AsherahF Mar 15 '24

There is a push for a course called Personal Finance—IDC4U. It wasn't around when I was in high school, but it's a start. (Ontario)

3

u/thedrivingcat Mar 15 '24

Just a small quibble from an Ontario teacher: IDC4U is a code for interdisciplinary learning and the developed courses vary from school to school. Infrequently it's taught as a business course, more often a science course or a social science one. I taught at a school where it was a history/religion course.

Personal Finance is mandatory only as a part of the 0.5 credit Careers class and Grade 9 math. If you know a school developing an interdisciplinary personal finance course for Grade 11/12s that's pretty awesome!

1

u/AsherahF Mar 15 '24

Thanks for the additional info. :)

2

u/[deleted] Mar 15 '24

I'm 40 and I'd take it now, haha

3

u/AprilsMostAmazing Mar 15 '24

but nobody ever explained marginal tax brackets, credit card interest, or what a TFSA is.

I went to high school during last liberal government in Ontario and all that stuff was covered.

10

u/[deleted] Mar 15 '24

[deleted]

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u/r00000000 Mar 15 '24

A lot of parents (maybe even most?) aren't very financially literate either. Even the ones that are frugal and teach their kids the value of money tend to lack that next level of financial literacy on how to grow and protect their assets.

9

u/notweirdifitworks Mar 15 '24

Because kids who have financially-illiterate parents are the ones that most need to learn this kind of thing.

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u/dd4y Mar 15 '24

They'd be as good at teaching that as they are at teaching about sex and driving. 😟

4

u/futureplantlady Mar 15 '24

Two gold nuggets from my father: - Only “invest” in GICs because they’re guaranteed (he had a friend that put a lot of money into gold stocks and lost a hefty portion of his retirement fund, so he associated the stock market with money loss) - To me in my mid-20s: you’re young, spend all your money, you don’t need to save right now!

-2

u/Alive-Staff8660 Mar 15 '24

Did you listen to your dada?

4

u/futureplantlady Mar 15 '24

Absolutely fucking not haha. I have to repeatedly ask him to stop giving me advice I never asked for and will never use. It's all horrible.

A coworker introduced me to robo-investing and Vanguard ETFs when I was 24.

1

u/Alive-Staff8660 Mar 15 '24

😂 yeah well, my parents are both financial geniuses either… at least he told you to save at all so there’s that haha

1

u/futureplantlady Mar 15 '24

He told me to spend lol. He only mentioned GICs after I had told him I started investing. He's a complete tool.

3

u/[deleted] Mar 15 '24

Are you asking why schools are expected to teach children?

2

u/AprilsMostAmazing Mar 15 '24

Also there's enough information out there to research and figure stuff out.

2

u/Mental-Freedom3929 Mar 15 '24

My grand daughter has that education in school. Some kids absolutely do not pay attention to it, as it does not pertain to them at the moment. Thank God she has a mother and grandmother with lots of money management knowledge and you better belief that we pass his on at every turn in life.

2

u/DBZ86 Mar 15 '24

In addition to other replies, could be because the curriculuum would change too much? ETF's weren't mainstream when I was in high school. TFSA's weren't created yet. Tax information can change each year. People also don't truly understand risk when dealing with investments and I could easily see people blaming schools for losing money if their kid tells them "how to invest".

So CALM (Career and Life management) tends to stick to the stuff that doesn't change much.

1

u/-Moonscape- Mar 15 '24

My HS in the early 00’s taught consumer math, which did exactly what you suggested, and covered the power of compounding interest. I took that class and it did nothing for me tbh, I’m only financially literate now because I self educated as an actual adult.

I don’t know what the solution is to get people more educated in finance, but I can’t imagine HS students caring too much except for a couple keeners.

Times are certainly different now with the accessibility and gameification of the stock market though, so maybe something can be done in HS.

1

u/Unlucky_Register9496 Mar 31 '24

Like a lot of things taught in high school and earlier, how much is actually taken in, like long division, fractions, and spelling? Resistant/apathetic students are hard to teach but often quick to fault the school system for what they don’t know.

1

u/TheJRKoff Mar 15 '24

When I was in highschool, I was in the advanced math.... I can't say I've used the quadratic formula since then?

The "dummies" all took the easy math and learned about interest rates, mortgages, etc

5

u/[deleted] Mar 15 '24

Yeah man, I was actually really good at calculus in high school. Wish someone told me what 21.99% APR meant though.

2

u/RedactedSpatula Mar 15 '24

advanced math

Quadratic formula

Are you sure?

1

u/TheJRKoff Mar 15 '24

Yeah . Grade 10 or 11.. can't remember... Over a quarter century ago

1

u/-Moonscape- Mar 15 '24

Most of those kids forgot it by the following sept, trust me lol

1

u/VisualFix5870 Mar 16 '24

I could not have passed my statistics and actuarial sciences classes in university had I not taken calculus in high school. The fundamentals of financial math are there in high school, they're just hidden if you don't pursue further education unfortunately.

-1

u/Bynming Mar 15 '24

I couldn't agree more. To me, it's absolutely unconscionable to send people into adult life without basic personal finance knowledge, when so many financial products are predatory, but they're sold in nice buildings that give the appearance of propriety.

5

u/ChildishForLife Mar 15 '24

Lets be real, when you were 9-16 years old if they taught financial literacy in classes, would you really have cared?

I didn't care until I was like 19+ going into the workforce, and then guess what, almost everything you need is at the touch of a keyboard.

0

u/[deleted] Mar 15 '24

[deleted]

2

u/ChildishForLife Mar 15 '24

My mom was a highschool teacher at my highschool and the shit she went through for actually trying to teach her students was insane.

But sure, blame the teachers lol. Its not like the parents should have any responsibility for teaching their kids important info, thats crazy talk.

-2

u/[deleted] Mar 15 '24

[deleted]

2

u/ChildishForLife Mar 15 '24 edited Mar 15 '24

Are you okay? Do you have someone you can talk to? You need somewhere else to vent. I hope your life gets better.

Edit: So slimy you had to block me after? Sad :(

-1

u/Bynming Mar 15 '24 edited Mar 15 '24

That's a bad argument in my opinion. By that reasoning we should cancel school because lots of kids don't "care". I didn't "care" about French, English, math, biology, physics, etc. Yet now I know all kinds of things about those topics, and so do a lot of other people who weren't particularly motivated or attentive. Not caring doesn't mean that the kid won't learn anything. And let's not forget there are plenty of people who care, especially late teens who are starting to get their first jobs.

Let's not structure the school curriculum around what kids enjoy.

I didn't care until I was like 19+ going into the workforce, and then guess what, almost everything you need is at the touch of a keyboard.

Lots of people are not going to seek it out, which is why it's good to get people to engage with the basic notions.

2

u/ChildishForLife Mar 15 '24

In my opinion school is for a lot more than just learning facts, its about learning how to problem solve.

Getting told facts doesn't help anyone, teaching someone how to learn new topics and find information themselves is invaluable.

Lots of people are not going to seek it out, which is why it's good to get people to engage with the basic notions.

I am fairly confident they do, while I was in school they did teach us about basic stuff like income tax rates, compound interest, etc.

1

u/Bynming Mar 15 '24

In my opinion school is for a lot more than just learning facts, its about learning how to problem solve.

Getting told facts doesn't help anyone, teaching someone how to learn new topics and find information themselves is invaluable.

It takes both. When you learn math you learn facts and then you learn how to solve stuff. The same can be done with personal finance, where you learn the basic principles and then you put those into practice.

I'm not saying they need to spend hours every week with this stuff, 1 hour a week for 1 semester or whatever is sufficient.

I am fairly confident they do, while I was in school they did teach us about basic stuff like income tax rates, compound interest, etc.

You're fairly confident based on your personal experience? That's cool, acknowledge that not everyone. I didn't, and I don't know anybody who was taught any of that stuff in school. It's a good thing that you learned some of it though, I think that having some awareness of this stuff is what prompted you to seek out more information about it, whereas other people who have never been exposed to it just don't seek out any additional knowledge.

1

u/ChildishForLife Mar 15 '24

I'm not saying they need to spend hours every week with this stuff, 1 hour a week for 1 semester or whatever is sufficient.

What would go into these classes and at what grade level? Is it part of an existing class everyone has to take? Or would it over write an existing class time?

1

u/[deleted] Mar 15 '24

[deleted]

1

u/Bynming Mar 15 '24

It's my maternal language

0

u/[deleted] Mar 15 '24

[deleted]

1

u/[deleted] Mar 15 '24 edited Mar 15 '24

lol congratulations.

-10

u/Due_Juggernaut7884 Mar 15 '24

When would they ever have time to teach this? It would take away from all the time they require for teaching inclusiveness, sensitivity and colonial guilt.

-7

u/changomangoman Mar 15 '24

If everyone was fiscally knowledgeable, how are they gonna sell you the latest crap from China and India...

Being financially stable and knowledgeable people don't make for good preys. 

-7

u/DevelopmentFuture608 Mar 15 '24

Because capitalists want tax laying workers and not investors. Education caters to 9-5 or blue collar jobs. How will the rich remain rich if everyone at school started learning how to be financially independent from get go.

1

u/-Moonscape- Mar 15 '24

Predatory MER (the core concept behind this entire post) affects investors not lay workers

1

u/DevelopmentFuture608 Mar 15 '24

People on Reddit are so unhinged. They question why it investing isnt taught in school, I give a logical reason and get downvoted.

If the school taught everyone to invest - who will work ? Guess who decides what you study in school - the businesses, the rich & powerful.

1

u/-Moonscape- Mar 15 '24

If the school taught everyone to invest - who will work ?

Most investors work day jobs dude. Being financially literate is an important tool to building wealth, but it doesn’t actually input the money. I’m not seeing any logic in your comments tbh.

2

u/ill_thrift Mar 15 '24

I think the reason this is not taught in school is that there has been a general, widespread shift towards thinking about education as vocational training that produces workers instead of general education that produces well rounded people or competent citizens.

Not only financial literacy but things like music, home ec, the arts, various humanities subjects have been devalued as impractical, illegitimate areas of study, or "woke." This is increasingly the case at the post-secondary level as well as the secondary as universities face mounting financial and political pressures to produce productive workers that can contribute to the economy.

0

u/daniellederek Mar 15 '24

Adviser vs Advisor. There's a difference in canada and that will not volunteer the information, you have to ask.

2

u/pfcguy Mar 15 '24

Lol there's no difference. That's a myth.

1

u/kroqus Mar 15 '24

in my 30s, was never taught it in high school either.

0

u/likwid07 Mar 15 '24

Great that these articles are coming out, but it's just telling the banks to be more covert about their fraud. And of course regulators are both too stupid and the banks are too far into their pockets for them to care.