Lower Mainland parents buy properties for when children become of age

Parents are always worried about something with their children, and where they are going to live and how they are going to afford it is no exception.
The bank of mom and dad is a common source of down payment for their children, and the strategy continues to grow with the significant rise in prices and wage gap growing in today’s marketplace.

For example, the upper middle class are buying properties for their kids and grand kids and the benefits are multifaceted: they generate income now, while someone else pays the mortgage (a tenant) and the value increases.

The families can then refinance at a later date and gift some equity that was pulled out what was essentially paid for by a tenant and continue generate income to assist with retirement, as most of this class sector doesn’t have the company pensions that were available a generation ago. However, even this group feels they are in crisis by not having enough cash flow to save for retirement. But with the above strategy, essentially your downsize home was purchased early with the basic principal of time working in your favor to get ahead even further ahead financially so everybody wins without sacrifice in this scenario.

Our demographics are changing rapidly and this is something that is motivated by families who want to keep their children close to them and hope to have them enjoy the same lifestyle they have created. The majority of Canadians implementing these strategies are households earning $200,000 a year and have a net worth of over $2 million, including real estate.

The amount parents have gifted their children has changed dramatically with the inflation changes over the years. In the 1980s, a gift for a down payment averaged $10,000, but today that amount is between $200,000 and $500,000!
According to mortgage insurer Genworth Financial, 40 per cent of first time home buyers in Vancouver had help from their parents, compared to 22 per cent in the rest of Canada.

These strategies are often not commonly considered and depending on the mortgage-provider choices you make early on, having a provider like the Angela Calla Mortgage Team that focuses on these wealth building strategies will help you avoid missing opportunities. Mainly because these are practices implemented by the team members personally.

Anybody can get you a mortgage, however, a proactive provider can assist you and show you what the wealthiest Canadians are doing so you don’t not miss opportunities.

Angela Calla, AMP, is host of The Mortgage Show on Saturdays at 7 pm on CKNW, one of Canada’s Top Mortgage Professionals, a Woman of Influence  and a CMP ‘Young Gun’. She has been helping Canadians avoid costly mistakes with mortgages and taking the fear out of financing for over 13 years from her Port Coquitlam Office. She can be reached at 604-802-3983 or callateam@dominionlending.ca

6 Deadly Financial Mistakes Canadians Make

Most working Canadians have a middle-class income range. This income class includes teachers, firefighters, plumbers, engineers, nurses, construction managers, and chefs – workers from across the professional spectrum. They provide and consume the bulk of services that keep society afloat, driving economic growth and investment with every purchase.

The middle class also has great challenges. Wages have been stagnant and the cost of housing and everyday goods puts a squeeze on the average budget, leaving 6 out of 10 Canadians living paycheque-to-paycheque with most accumulating debt.

In part, this has to do with everyday life and the growing demands of our set of unique challenges. However, we need to “control the controllable” and be smart and strategic to get ahead.

1. Spend within your means
Most people keep a balance at month’s end on their credit cards and lines of credit – some out of necessity, but some by choice because they want to keep up with the Joneses or fill an emotional void. If you are trying to get ahead financially, ask yourself what your plan is to get rid of that debt. It should not be something that is with you to carry over a balance. It’s time to assess your lifestyle and how you are using your home equity and the market to your advantage if you own a home.
Holding the debt is a costly mistake – most debts outside a mortgage charge interest ranging from more than 5% to 19%. Credit is an important part of life and you need it. The biggest life hack is to pay it in full every month with an auto setup payment – this one strategy saves costs, debt, and stress.

2. An emergency fund is a must
Ask yourself this, what would happen right now if your car broke down, your house needed a new roof, or you lost your job? Most Canadians would have to go to credit cards or lines of credit.
You need 6 months of expenses put aside, period. If you don’t have this you will begin a cycle of debt. There are ways to do this automatic withdrawal into an account from your paycheque or when your mortgage renewal is up.

3. Giving your retirement a raise and start in high school
Consider how long wages have felt stagnant while the cost of everything goes up. When you are young and your wages go up, increase your retirement contribution. Get compound interest working for you. Time is your friend. By saving a percentage automatically by paying yourself first, your investment grows your options.
There are tax-free savings accounts and RRSP’s that will begin the foundation of your financial future. It should start from the moment you get your first job, then when you fast forward through your 20s to 50s, your investment doesn’t have to be as large. Life will throw you enough challenges at that time to deal with, and you already have time and compound interest working for you, and you are in front of it, not chasing to catch up.

4. Relying on RRSP’s, OAS and CPP
Contributing to tax-advantaged products is one component of investing, but there are restrictions. Also, future government income plans are always going to be changing. Having a proactive mortgage and finance plan will allow you to get your assets working for you, so you can have multiple streams of income. Being self-sufficient is empowering, then if and when the other options are still available and advantageous, they are a bonus and you are in control based on your proactive abilities.

5. Spending too much on depreciating assets
The average Canadian spends $570 a month on a new car payment. This can go up to as much as $1,400 per month- that’s just for the car, not insurance, gas, or maintenance. The problem is that it’s a depreciating asset. To put it into perspective, that range in payment takes away qualification for a whopping $150,000 to $400,000 in mortgage amount qualification.
For someone in the middle class who intends to buy a home, which is an appreciating asset, the car payment should be the absolute lowest priority and should be avoided whenever possible. Think of the power you could have saving that kind of money or having it in an income-generating asset.

6. Having a will and keeping it current
Your will should include your up-to-date investments, insurance policies, real estate and family gems. With life happening so quickly, it’s easy to let a few years fly by, but then things can get messy. You don’t want your hard-earned money in the hands of anyone but for whom it’s intended.
If you want to learn more, a recently published study by Point2 Homes investigates whether various Canadian professions earn enough to live comfortably with a mortgage.

Angela Calla, AMP, is host of The Mortgage Show on Saturdays at 7 pm on CKNW, one of Canada’s Top Mortgage Professionals, a Woman of Influence  and a CMP ‘Young Gun’. She has been helping Canadians avoid costly mistakes with mortgages and taking the fear out of financing for over 13 years from her Port Coquitlam Office. She can be reached at 604-802-3983 or callateam@dominionlending.ca

https://www.point2homes.com/news/canada-real-estate/6-deadly-financial-mistakes-canadians-make.html

http://www.cbc.ca/news/business/bank-s-deceptive-titles-put-investments-at-risk-1.4044702?platform=hootsuite

Mike Black says he feels “completely betrayed” after trusting RBC Dominion Securities employees with impressive-sounding titles to manage his life savings, only to earn far below the market average for six years.

“I worked 35 years at two jobs and saved up a considerable amount due to the fact that I didn’t have a pension and would need money for retirement,” said Black, who managed to put away nearly $1 million.

An RBC “financial advisor” — “advisor” with an “o” rather than an “e” is important, but more on that later — invested his money in mutual funds, but when the portfolio performed poorly for three years and Black threatened to leave the bank, he was sent to an RBC “vice-president” who would manage his money.

Black received a financial plan that claimed his nest egg would earn “about six per cent in annual interest” when invested in different mutual funds, mostly owned by RBC.
His investments actually earned less than three per cent and cost Black more than $30,000 in fees over six years.

“How is it that you end up getting a return of this kind over this period of time, when this is to be managed by a professional and we pay such high fees?”

‘All they are doing is selling what the bank wants them to sell.’
– Mike Black, RBC investor
Turns out, the RBC vice-president was actually licensed as something called a “dealing representative” — a salesperson.

“I feel duped,” Black said. “My portfolio is my pension. All they are doing is selling what the bank wants them to sell.”

In an email to Go Public, RBC said its “internal review found that the portfolio was appropriate based on the risks and objectives the client communicated to us.”

Deceptive employee titles

A recent report by the Small Investor Protection Association found there are 121,000 people registered as financial professionals in Canada, and the vast majority are registered as dealing representatives — salespeople licensed to sell financial investments.

Only about 4,000 of these registered financial professionals have a fiduciary duty, which is a legal obligation to act in the client’s best interest.
Larry Elford says thousands of bank employees across Canada are salespeople with fancy titles. (Dave Rae/CBC )

“The game today is to earn clients’ trust,” said Larry Elford, a former certified investment manager with RBC and lead researcher of the SIPA report. “And never let them know that you are actually a commissioned salesperson and you don’t have to honour that trust.”

The stakes are high, says Elford, who points out that a two per cent management fee on mutual funds typically cuts an investor’s retirement fund by about half over a 35-year period.

What’s in a vowel?

A common trick for misleading customers, according to Elford, is the banking industry’s use of the term “financial advisor” — spelled with an “o.”

He says “advisor” is an unregulated title that anyone can use, whereas the title “adviser” — spelled with an “e” — can only be used if the employee has a fiduciary responsibility to the client.

“Advisors can sell you the third, fourth, fifth or least beneficial product to you,” Elford said. “They do that a great deal of the time if it makes them more commissions, or if their bank manager is telling them they need to sell more of the house-brand product.”

The Ontario Securities Commission confirms that “adviser” is a legal term under securities law that describes a person or company that is registered to give advice about securities, whereas “advisor” is not.

In an email to Go Public, the Canadian Securities Administrators confirmed that it does not regulate most titles used by employees in the financial industry.

‘It’s completely about selling’

Many bank employees who’ve contacted Go Public say they act more like salespeople than anything else because of pressures from “high up” to hit revenue targets. CBC is concealing their identities to protect their jobs.

“I would say 90 per cent of my day is trying to hit targets,” said a financial services representative at TD Bank.

“I have to go [meet with] my manager daily and go through each customer that’s scheduled for me and see how many ‘units’ I can get from that customer.”

‘I had zero training and had to learn on the go.’
– TD financial advisor who recently quit
She says if a client has money in a savings account, she’s encouraged to get them to buy TD mutual funds instead of giving financial advice she thinks would be better, such as paying down a credit card or high-interest loan.

“It’s completely about selling,” she said.

A TD financial advisor who quit last month says he was “thrown into the role” and expected to learn on the job.
A TD financial services representative who contacted Go Public said 90 per cent of her day is spent trying to hit sales targets. (Chris Wattie/Reuters)

“I had zero training and had to learn everything on the go,” he said.

A CIBC financial advisor says he spends his day selling investments that may not be in his customers’ interests, even though they think they’re getting impartial advice.

“The term financial advisors is bank jargon for salesperson,” he said. “At least in other industries they are more open about it. You sell cars? Well, you are a car salesperson. We are not advising people on anything. We are just trying to make sales.”

Employees at Canada’s 5 big banks speak out about pressure to dupe customers
TD teller says customers pay price for ‘unrealistic’ sales targets
An RBC branch manager in B.C. says tellers are now called “client advisors,” and are required to get a licence to sell mutual funds.

“How do you expect a 20-year-old employee who’s getting paid $12 an hour to provide advice with the title ‘client advisor,’ when they’re really just equipped to sell? It’s not fair to anybody … you’re putting clients at risk.”

In a statement, RBC says it “stands behind the advice and support” its “investment advisors provide to clients.”

Bank employees at all levels at BMO and Scotiabank told Go Public they, too, feel their titles are misleading because they’re mostly under pressure to sell bank-owned mutual funds and other products to boost the bottom line.

In previous statements to Go Public, TD, CIBC and Scotiabank said their clients are their top priority and they expect their employees to behave ethically.

‘Self-regulating doesn’t work very well’

Stan Buell, founder of the Small Investor Protection Association, says he’s heard too many stories from people who thought a financial advisor was going to look out for their best interests.
Stan Buell, founder of the Small Investor Protection Association, says bank employees should be called salespeople if that’s their role.

“I’ve talked to hundreds and hundreds of people who’ve been victimized,” Buell said. “And every one trusted their advisor.”

He said he doubts any of the advisors were actually advisers — with an “e” and a fiduciary duty. “They’re all salespeople, trained in sales.”

He says banks and other financial institutions need tougher regulations.

“Self-regulating doesn’t work very well,” he said. “It must be an outside agency that is not composed of the industry to have the power to handle complaints, to investigate and authorize and even pay restitution for the victims of the financial institutions.”

As a start, Buell would like Canada’s big banks to be more transparent and call their employees salespeople, not “advisors” or other titles that suggest they’re working in the customer’s interest when they’re actually serving their employer.

Call centre employees for big banks reveal upsell pressures
ANALYSIS| Banks are businesses, and you are a profit centre
Mike Black says he took his money out of those fee-based accounts at RBC Dominion Securities and hopes for better luck with his next investment.

But his experience has left him shaken.

“I’ve always been very trusting, conscientious, both me and my wife. We’ve walked the walk. And quite frankly, I feel like it’s been a hit and run.”

https://soundcloud.com/cknw/the-mortgage-show-april-12017-stewart-interview Hear from 2nd time client of #Coquitlam Stewart that we helped redo his mortgage and save $ 1,800.00 a month which sure helps being #selfemployed and having 3 little munchkins #wehaveamortgageforthat

The key to their success was coming to us for the right mortgage the 1st time, this allowed them to take advantage of future opportunities and changes in the market and lifestyle

The Angela Calla Mortgage Team gives you clarity on the best mortgage by being transparent, unbiased free mortgage advise with choice. We are here to help you personally with your mortgage at 604-802-3983 or callateam@dominionlending.ca

Hear from our 2nd time client Vinny of #Vancouver that we helped save $950/ a month by redoing him mortgage from some debt he accumulated while working full time and going to school to change careers #wehaveamortgageforthat

The Angela Calla Mortgage Team gives you clarity on the best mortgage by being transparent, unbiased free mortgage advise with choice. We are here to help you personally with your mortgage at 604-802-3983 or callateam@dominionlending.ca

Mike Black says he feels “completely betrayed” after trusting RBC Dominion Securities employees with impressive-sounding titles to manage his life savings, only to earn far below the market average for six years.
“I worked 35 years at two jobs and saved up a considerable amount due to the fact that I didn’t have a pension and would need money for retirement,” said Black, who managed to put away nearly $1 million.

An RBC “financial advisor” — “advisor” with an “o” rather than an “e” is important, but more on that later — invested his money in mutual funds, but when the portfolio performed poorly for three years and Black threatened to leave the bank, he was sent to an RBC “vice-president” who would manage his money.

Black received a financial plan that claimed his nest egg would earn “about six per cent in annual interest” when invested in different mutual funds, mostly owned by RBC.

Been Wronged? Contact GoPublic@cbc.ca

His investments actually earned less than three per cent and cost Black more than $30,000 in fees over six years.

“How is it that you end up getting a return of this kind over this period of time, when this is to be managed by a professional and we pay such high fees?”

Turns out, the RBC vice-president was actually licensed as something called a “dealing representative” — a salesperson.
“I feel duped,” Black said. “My portfolio is my pension. All they are doing is selling what the bank wants them to sell.”

In an email to Go Public, RBC said its “internal review found that the portfolio was appropriate based on the risks and objectives the client communicated to us.”

Deceptive employee titles

A recent report by the Small Investor Protection Association found there are 121,000 people registered as financial professionals in Canada, and the vast majority are registered as dealing representatives — salespeople licensed to sell financial investments.   

Only about 4,000 of these registered financial professionals have a fiduciary duty, which is a legal obligation to act in the client’s best interest.

“The game today is to earn clients’ trust,” said Larry Elford, a former certified investment manager with RBC and lead researcher of the SIPA report. “And never let them know that you are actually a commissioned salesperson and you don’t have to honour that trust.”

The stakes are high, says Elford, who points out that a two per cent management fee on mutual funds typically cuts an investor’s retirement fund by about half over a 35-year period.
What’s in a vowel?
A common trick for misleading customers, according to Elford, is the banking industry’s use of the term “financial advisor” — spelled with an “o.”

He says “advisor” is an unregulated title that anyone can use, whereas the title “adviser” — spelled with an “e” — can only be used if the employee has a fiduciary responsibility to the client.
“Advisors can sell you the third, fourth, fifth or least beneficial product to you,” Elford said. “They do that a great deal of the time if it makes them more commissions, or if their bank manager is telling them they need to sell more of the house-brand product.”

The Ontario Securities Commission confirms that “adviser” is a legal term under securities law that describes a person or company that is registered to give advice about securities, whereas “advisor” is not.

In an email to Go Public, the Canadian Securities Administrators confirmed that it does not regulate most titles used by employees in the financial industry.
‘It’s completely about selling’ Many bank employees who’ve contacted Go Public say they act more like salespeople than anything else because of pressures from “high up” to hit revenue targets. CBC is concealing their identities to protect their jobs.

“I would say 90 per cent of my day is trying to hit targets,” said a financial services representative at TD Bank.

“I have to go [meet with] my manager daily and go through each customer that’s scheduled for me and see how many ‘units’ I can get from that customer.”

She says if a client has money in a savings account, she’s encouraged to get them to buy TD mutual funds instead of giving financial advice she thinks would be better, such as paying down a credit card or high-interest loan.

“It’s completely about selling,” she said.

A TD financial advisor who quit last month says he was “thrown into the role” and expected to learn on the job.

“I had zero training and had to learn everything on the go,” he said.
A CIBC financial advisor says he spends his day selling investments that may not be in his customers’ interests, even though they think they’re getting impartial advice.

“The term financial advisors is bank jargon for salesperson,” he said. “At least in other industries they are more open about it. You sell cars? Well, you are a car salesperson. We are not advising people on anything. We are just trying to make sales.”

An RBC branch manager in B.C. says tellers are now called “client advisors,” and are required to get a licence to sell mutual funds.
“How do you expect a 20-year-old employee who’s getting paid $12 an hour to provide advice with the title ‘client advisor,’ when they’re really just equipped to sell? It’s not fair to anybody … you’re putting clients at risk.”
In a statement, RBC says it “stands behind the advice and support” its “investment advisors provide to clients.” 

Bank employees at all levels at BMO and Scotiabank told Go Public they, too, feel their titles are misleading because they’re mostly under pressure to sell bank-owned mutual funds and other products to boost the bottom line.
In previous statements to Go Public, TD, CIBC and Scotiabank said their clients are their top priority and they expect their employees to behave ethically. 

‘Self-regulating doesn’t work very well’
Stan Buell, founder of the Small Investor Protection Association, says he’s heard too many stories from people who thought a financial advisor was going to look out for their best interests.

“I’ve talked to hundreds and hundreds of people who’ve been victimized,” Buell said. “And every one trusted their advisor.”

He said he doubts any of the advisors were actually advisers — with an “e” and a fiduciary duty. “They’re all salespeople, trained in sales.”
He says banks and other financial institutions need tougher regulations.

“Self-regulating doesn’t work very well,” he said. “It must be an outside agency that is not composed of the industry to have the power to handle complaints, to investigate and authorize and even pay restitution for the victims of the financial institutions.”

As a start, Buell would like Canada’s big banks to be more transparent and call their employees salespeople, not “advisors” or other titles that suggest they’re working in the customer’s interest when they’re actually serving their employer.

Mike Black says he took his money out of those fee-based accounts at RBC Dominion Securities and hopes for better luck with his next investment.
But his experience has left him shaken.  

“I’ve always been very trusting, conscientious, both me and my wife. We’ve walked the walk. And quite frankly, I feel like it’s been a hit and run.”

http://www.cbc.ca/news/business/bank-s-deceptive-titles-put-investments-at-risk-1.4044702

The Angela Calla Mortgage Team gives you clarity on the best mortgage by being transparent, unbiased free mortgage advise with choice. We are here to help you personally with your mortgage at 604-802-3983 or callateam@dominionlending.ca

Val of #coquitlam joins Angela Calla Mortgage Team on CKNW to share how we saved her $1,388.33 monthly by redoing her #mortgage which means:
1. She doesn’t have to sell her house
2. Go back to work out of retirement!
3. It relieves the stress of her feeling like she may have to burden her children.
I would say that’s pretty life changing & the difference of your options when you work with someone who gives you the power of choice #wehaveamortgageforthat #itpaystoknow #whenyouknowbetteryoudobetter

Contact The Angela Calla Mortgage Team directly to help you at 604-802-3983 or callateam@dominionlending.ca

Just because your existing #mortgagelender will offer you a #renewal and what appears to be a good rate, doesn’t mean it’s the best for you! Doug of #portcoquitlam joins Angela Calla Mortgage Team on CKNW to share how we saved him $1,700.00 monthly by us redoing his mortgage. He wants those he cares about, not to make the costly mistake he did for decades dealing with the lenders himself. We can’t rewind time however saving $1,700.00 moving forward sure helps ease the pain. #wehaveamortgageforthat #whenyouknowbetteryoudobetter https://soundcloud.com/cknw/the-mortgage-show-march-182017-doug-interview

Contact The Angela Calla Mortgage Team directly to help you 604-802-3983 or callateam@dominionlending.ca

Employees from all five of Canada’s big banks have flooded Go Public with stories of how they feel pressured to upsell, trick and even lie to customers to meet unrealistic sales targets and keep their jobs.

The deluge is fuelling multiple calls for a parliamentary inquiry, even as the banks claim they’re acting in customers’ best interests.

In nearly 1,000 emails, employees from RBC, BMO, CIBC, TD and Scotiabank locations across Canada describe the pressures to hit targets that are monitored weekly, daily and in some cases hourly.

“Management is down your throat all the time,” said a Scotiabank financial adviser. “They want you to hit your numbers and it doesn’t matter how.”
CBC has agreed to protect their identities because the workers are concerned about current and future employment.

An RBC teller from Thunder Bay, Ont., said even when customers don’t need or want anything, “we need to upgrade their Visa card, increase their Visa limits or get them to open up a credit line.”
http://www.cbc.ca/news/business/banks-upselling-go-public-1.4023575

“It’s not what’s important to our clients anymore,” she said. “The bank wants more and more money. And it’s leading everyone into debt.”

A CIBC teller said, “I am expected to aggressively sell products, especially Visa. Hit those targets, who cares if it’s hurting customers.”

Former BMO employee speaks out

A financial services manager who left BMO in Calgary two months ago said he quit after having a full-blown panic attack in his branch manager’s office as she threatened to stifle his banking career because he hadn’t met sales targets.

“It was like the only thing they cared about at BMO,” he said. “If you weren’t selling, you weren’t worth having around.”

This former BMO financial services manager says his manager told him to lie to customers to improve sales revenue. (Colin Hall/CBC)

He claims his manager once told him not to tell clients who wanted to invest more than $40,000 that the markets were down, because putting their money into GICs wouldn’t earn the branch as much sales revenue.

He said she also told him to attach high interest rates on mortgages and lines of credit and to not tell clients those interest rates are negotiable.
He said he was “pressured to lie and cheat customers,” but refused to do it.

More than 1,000 emails

The revelations about other banks came pouring in after Go Public revealed last week that front-line staff at TD were under pressure to sell customers products and services they may not need and that some employees were breaking the law  to hit their sales revenue targets.

Those stories, experts say, prompted the largest drop in TD Bank shares since the financial market downturn of 2009.

‘We are straight up told to tell false stories (lie) to sell products.’
– TD insurance broker wrote in an email

They also resulted in hundreds more emails from TD workers past and present, including a teller who recently stopped working in Bramalea, Ont., who said the requirement to meet ever-increasing goals was so unprofessional, “I thought this was not a bank but a flea market.”

He admits to acting unethically because he says he feared being fired.

“I bumped up credit cards, overdraft or account types just because of the pressures.”

A TD insurance broker in Barrie, Ont., wrote, “We are straight up told to tell false stories (lie) to sell products.”
And an RBC financial adviser told Go Public, “We are all doing it.”

‘Shaming’ and ‘bullying’

Many bank employees described pressure tactics used by managers to try to increase sales.

An RBC certified financial planner in Guelph, Ont., said she’s been threatened with pay cuts and losing her job if she doesn’t upsell enough customers.

“Managers belittle you,” she said. “We get weekly emails that highlight in red the people who are not hitting those sales targets. It’s bullying.”
Employees at several RBC branches in Calgary said there are white boards posted in the staff room that list which financial advisers are meeting their sales targets and which advisers are coming up short.

Similar white board results are reported at Scotiabank branches in Toronto.

“The entire team can see who is keeping them down. It’s shaming,” said a Scotiabank financial adviser who told Go Public she’s taking early retirement “because this environment is not for me.”

Stressed out

Some of the big five bank employees said they’re so stressed by expectations to hit sales targets, they’re on medical leave. Others said they had to quit.

They wrote about their jobs causing “insomnia,” “nausea,” “anxiety” and “depression.”

A CIBC small business associate who quit in January after nine years on the job said her district branch manager wasn’t pleased with her sales results when she was pregnant.

“She came into my office and decided to harass me. I went into a full-blown panic attack.”

She said the worst part of her job was having young families in her office who agreed to re-mortgage their homes because of debt.

“We told them we were helping them, but essentially we were extending more credit so the vicious cycle would … continue and we, in turn, would make a sale,” she said.
While working in Waterloo, Ont., she says her manager also instructed staff to tell all new international students looking to open a chequing account that they had to open a “student package,” which also included a savings account, credit card and overdraft.

“That is unfair and not the law, but we were told to do it for all of them.”

Big banks decline interview requests

Go Public requested interviews with the CEOs of the five big banks — BMO, CIBC, RBC, Scotiabank and TD — but all declined.

Instead, they sent statements, essentially saying the banks act in the best interest of their clients, and that employees are expected to follow codes of conduct.

The statements did not address employees’ concerns about high-pressure sales tactics.

Calls for parliamentary inquiry

NDP finance critic Alexandre Boulerice is now calling for a parliamentary inquiry into the sales practices of Canada’s banks.

“We expect banks to be honest with their clients … and now we are learning that those employees are under considerable pressure to sell, sell, sell to boost profits of the banks,” he said. “This is so greedy. It is not acceptable.”

Stan Buell, founder of the Small Investor Protection Association, agrees it’s time for the federal government to take action.

“We’ve got a culture that exists on greed, lying and deceiving people, and it’s not going to end soon,” he said.

“This is why the only solution really is to have government step in and look after the Canadian people. Because I feel the Canadian people deserve better than to serve as grist for the mill of these great financial organizations.”

Stan Buell from the Small Investor Protection Association says the government needs to step in. (CBC)

A spokesperson for Finance Minister Bill Morneau said the minister wasn’t available for an interview, but sent a statement that says Morneau “expects all financial institutions in Canada to adhere to the highest standards when it comes to their consumer protection obligations.”

Shareholders concerned

TD shareholder Allan Best says he’s concerned about more than the bank’s bottom line after last week’s stock dip, telling Go Public, “It is my position that employees are our most important asset and we have to do all we can to keep them in good mental and physical condition.”

The emails Go Public received from bank employees suggest not only have the sales targets increased dramatically in recent years, so has the pressure to meet them.

“I want the world to know how much pressure we are all under on a daily basis,” wrote an RBC teller in Ontario.

“We hit our target and the next week, they up them again. It’s out of control.”

A CBC report earlier this week about TD employees pressured to meet high sales revenue goals has touched off a firestorm of reaction from TD employees across the country — some of whom admit they have broken the law at their customers’ expense in a desperate bid to meet sales targets and keep their jobs.
Hundreds of current and former TD Bank Group employees wrote to Go Public describing a pressure cooker environment they say is “poisoned,” “stress inducing,” “insane” and has “zero focus on ethics.”  

Some employees admitted they broke the law, claiming they were desperate to earn points towards sales goals they have to reach every three months or risk being fired. CBC has agreed to conceal their identities because their confessions could have legal ramifications.

TD insists all its employees are to follow the company’s code of ethics, but many employees who contacted Go Public said that’s impossible to do given the sales expectations.

“I’ve increased people’s lines of credit by a couple thousand dollars, just to get SR [sales revenue] points,” said a teller who worked for several years at a TD branch in Windsor, Ont.

He admits he didn’t tell the customers, which is a violation of the federal Bank Act.

A former teller at this TD branch in Windsor, Ont., admits he increased customers’ lines of credit without their knowledge to meet his sales targets.

Another teller with over 20 years’ experience at an Ontario TD branch said she has increased customers’ overdraft protection amounts without their knowledge, and increased their TD Visa card limits on the sly — all to earn units towards her sales revenue target.

Many TD workers wrote to say they are on medical leave, suffering from anxiety and/or depression because of the constant pressure to up sell customers.

One teller on sick leave described how a manager stood behind her three times a day, pushing her to sell more.

‘They just really stress you out … I’d be be thinking … ‘What can I do tomorrow to try and get sales?”
– TD teller 

“They just really stress you out and say, ‘You’re not doing good. I need you to do double the amount you’ve been doing.’ I couldn’t sleep. I’d be thinking … ‘What can I do tomorrow to try and get sales?'”

She admits to upgrading customers to a higher-fee account without telling them.

“Because that gives us sales revenue. And the customers don’t have to sign for it.”

‘I wouldn’t have noticed the $29.95’ Bev Beaton believes she’s been a victim of a TD teller desperate to generate sales revenue.

In January, she noticed a service charge on her account for $29.95. When she called TD to ask about it, she was told it was because she was in an account that required her to keep a minimum monthly balance of $5,000 or she would be charged that monthly fee.

Bev Beaton says a teller at her TD branch in Victoria moved her into a higher-fee account without her knowledge. (Bev Beaton )

“I said, ‘I did not ask for this account. There’s no way I would have asked for this account.’ And [the bank employee] said, ‘You must have.'”

When Beaton checked her statements, she saw that she’d been moved to the higher-fee account last May, but only noticed when her balance dropped below $5,000 for the first time in December and she was hit with the service charge.

“I was very annoyed,” Beaton said. “And I think it’s dishonest. Because if I wasn’t looking at my statement closely, I wouldn’t have noticed the $29.95.”

Financial advisers also admit deceit:TD employees tell Go Public the pressure to deceive customers extends beyond front-line staff to workers handling wealth management.
‘I have invested clients’ savings into funds which were not suitable, because of the … pressure.’ – TD financial adviser 

“We do it because our jobs are at stake,” said one financial adviser in Ontario. She admits she acted in her own interest rather than that of her clients after being put on a Performance Improvement Plan — a program that involves coaching and could result in termination of employment — because she wasn’t meeting her sales targets.

“I have invested clients’ savings into funds which were not suitable, because of the SR [sales revenue] pressure,” she said. “That’s very difficult to admit. I didn’t do this lightly.”  

‘I was forced to lie to customers’A former TD financial adviser in Calgary says he would downplay the risk of products that gave him a big boost towards his quarterly goal.”I was forced to lie to customers, just to meet the sales revenue targets,” he said.”I was always asked by my managers to attach unnecessary products or services to the original sale just to increase the sales points — and not care if the customer can afford it or not.

TD teller says clients pay price for bank’s ‘unrealistic’ sales targets. A financial adviser who worked for six years in Nanaimo, B.C., before quitting says “people eventually snap, or lose all sense of themselves and do anything to close sales.” “I have had multiple conversations with branch and district managers. These conversation lead to my being asked if I was still the right fit for the job.”Employees must abide by code of ethics: TD 

In statement provided to Go Public, TD spokesperson Daria Hill wrote every employee must “act ethically and … not allow a focus on business results to come before our focus on customers.”

In an internal letter written to TD employees and obtained by Go Public, Andy Pilkington, executive vice-president of branch banking, wrote, “We don’t believe the [CBC] story is an accurate portrayal of our culture,” but said the report was an opportunity “to pause, reflect and ask ourselves … how we can do better for our people and our customers.”

One TD teller balked at Pilkington’s letter, sending an email to Go Public that says, “Maybe if they stood back for a moment and thought about how they have put so much pressure on employees (with ridiculous sales goals) they wouldn’t be in this situation right now!”

Concern for seniors:News that bank employees are required to meet what they consider to be extreme sales goals — with some even acting underhandedly — is a concern to Wanda Morris, vice-president of advocacy for CARP, a national advocacy association for people over age 50.

“As people age, there’s a little bit of decline in their cognitive functioning so they trust others and are potentially at risk from somebody who doesn’t have their best interests at heart,” she said.

Wanda Morris of CARP, an advocacy group for Canadians over age 50, wants legislation that requires bank employees to act in a customer’s best interest. (CBC)

“Canadian banks are some of the most profitable companies in this country. I hope we’ll see … some more empathy towards both employees and customers.”

Calls for government intervention:

Democracy Watch founder Duff Conacher says the fact that hundreds of bank employees have written to express concern over their high-pressure sales environment is an indication that Ottawa needs to act.

“We need the federal government to put rules in place and stop being so negligent — allowing the banks to get away with this unethical gouging and unethical sales practices,” he said.

Democracy Watch co-founder Duff Conacher says now is the time for people to push the federal government to improve bank regulations because the Bank Act is currently under review.

“The fact that the CBC is revealing this as opposed to [the Financial Consumer Agency of Canada] or the ombudsman for banking services shows just how much the government has failed to ensure that those protection watchdog agencies have the powers, have the mandate and the resources to do their job.”

Conacher says now is the time for people to pressure Ottawa to tighten bank regulations because the federal Bank Act is currently under review.

“I just find it amazing that we haven’t seen any political party or politician stand up and say, ‘We’re going to make these key changes to ensure that banks are required to serve everyone fairly … and look out for their customers’ best interests and not just try and gouge them.'”
with files from James Roberts