Can you really trust the banks with your Life Insurance?
Earlier this year, news broke that TD Bank employees were increasing clients’ credit limits and over draft protections without their knowledge – and more. Why? The employees, who really didn’t want to break the law and engage in these unethical practices, admit to buckling under extreme sales pressure from management.
One teller, who is now on sick leave, anonymously reported that, “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?’” Another confessed, “We do it because our jobs are at stake…I have invested clients’ savings into funds which were not suitable because of the SR [sales revenue] pressure. That’s very difficult to admit. I didn’t do this lightly.”
You can view the full article here, but if you rushed to switch banks after learning about what was going on at TD, you aren’t going to fare much better elsewhere. CBC’s article, ‘We are all doing it’: Employees at Canada’s 5 big banks speak out about pressure to dupe customers came out on March 15, and it was shocking.
CBC reports that, since the TD Banks scandal came to light, employees from all of Canada’s big five (TD, BMO, CIBC, Scotiabank, RBC) have come to Go Public (one of CBC’s media investigation branches) to tell how they felt they had no choice but to trick, lie and upsell to meet impossible sales goals. By the 15th, more than 1,000 bank employees across Canada had come forward. CBC is protecting the identities of the informants.
Horrifying Stories of Sales Target Abuse
The stories from the bank tellers and advisors are deeply disturbing. Excerpts from these recent articles quote informants as saying:
“Managers belittle you…we get weekly emails that highlight in red the people who are not hitting those sales targets. It’s bullying.”
“I bumped up credit cards, overdraft or account types just because of the pressures.”
“We are straight up told to tell false stories (lie) to sell products.”
Many complained of suffering from guilt, insomnia, nausea, anxiety and depression. More than one was on medical distress leave, had to quit or took an early retirement to avoid engaging in the sales tactics.
What Happens Now?
The Financial Consumer Agency of Canada (FCAC) is getting involved.
“Financial institutions’ compliance with these rules is non-discretionary and the message must be disseminated from the boards of directors on down to customer-facing staff. Through the industry review we are announcing today, we will examine financial institutions’ business practices in relation to express consent and disclosure, including the identification of any factors that may be contributing to non-compliance,” announced FCAC’s commissioner, Lucie Tedesco.
The review commenced in April. Meanwhile the banks will only say that they act, and continue to act, in the best interest of their clients and that employees are expected to follow rules of conduct.
What Does this Mean for You?
First, check your statements and question any fee, service or limit increases that you did not agree to. Next, don’t panic. What is going on is unsettling, but it will be fully investigated and you do have options when it comes to financial services – options that are outside of the banks.
What Are My Options?
Life insurance brokers can do far more than just sell life insurance policies. Brokers are licenced to advise on financial matters, life and health insurance and some do mutual funds and segregated funds.
You don’t need to (and shouldn’t) buy your mortgage insurance, from your bank – it is not portable and loses value as your mortgage gets paid off anyway.
Brokers can even open you a chequing account and when it comes to insurance (and yes, banks do sell insurance), saving and investing, brokers can help you out with far more than you’d expect… not to mention the personal service.
But Why a Broker Instead of a Bank?
Choose a broker over a bank because of these three beautiful words: NO. SALES. PRESSURE.
Brokers are freelancers. They do not sit in one office and work for one company. Brokers, be it your tech-friendly broker that works with you online via screen share, or your broker in the brick-and-mortar that has a staff of five, sell products from ALL the insurers in Canada.
This is the most poorly understood point: A broker is not an agent and a brokerage firm is not an agency.
An agent within an agency, such as a TD life insurance advisor, can only sell the products that TD Bank offers. Since the agent is an employee of the agency (TD Bank), the agent is expected to meet sales targets. Brokers do not have sales targets to meet because they do not work for an agency.
Not having any pressure to make a sale is the difference between trying to justify shady selling practices and keeping the best interests of the clients in mind. Brokers have so many options that they know they are going to find a policy that works for your situation.
They never have to pressure you into a choice of one or two narrow policies that don’t suit your needs. They also don’t have anyone standing over their shoulder demanding sales reports.
No pressure simply equals best practices. Most brokers go into financial services because they genuinely want to help people with their finances. Getting licenced is a process that involves testing and regulation, and the life insurance broker has to invest financially in the process as well.
These are not people that are out to make a quick buck at your expense, or people that have to satisfy someone else’s quota. Brokers are people that want to help you, and they do so with the best range of options on the market. Plus, most brokers generally hope to build a relationship with you that lasts longer than one sale.
Call to find out more
Hey, don’t just take my word for it! Call and discuss it with us or look up our testimonials on google. We know when it comes to your money, you are – and should be – concerned about best practices.
As a broker, our lack of sales pressure simply means we work for nobody but you, every single time.
Call us at 1.888.498.5288