Canada’s Big Six banks provide the financial advisors who work at their branches with the financial and reputational backing of some of Canada’s oldest and most trusted financial services institutions. Yet, along with this comes a significant amount of public scrutiny by Canadians.
That scrutiny was especially pronounced this past year, as five of these banks – and their advisors – dealt with the fallout from several high-profile media reports regarding unfair sales practices. Those reports resulted in a review of the banks’ business practices by the Financial Consumer Agency of Canada (FCAC).
The FCAC’s ensuing report, delivered in March, stated that the banks had “insufficient” controls to prevent sales of financial products that may be misrepresented or unsuitable for clients. The report also concluded that the banks’ sales-oriented culture increases the risk that bank employees may disregard consumer protection rules.
But while some of the advisors surveyed for this year’s Report Card on Banks pointed to this episode as cause for concern, the vast majority of advisors said that their banks’ reputations remain excellent among their clients. Although the overall average performance rating in the “firm’s reputation with clients and/or prospective clients” category dropped to 8.6 from 8.8 year-over-year, all of the banks received individual ratings of at least 8.0.
Advisors noted that although there always will be clients who don’t trust these institutions because of their size, many more clients trust their bank to do the right thing. And advisors at each of the Big Six banks have faith that the business models under which they operate are designed to put the needs of the clients, not the bottom line, first.
This client-centric approach was the factor cited most by advisors with Royal Bank of Canada (RBC) and Canadian Imperial Bank of Commerce (CIBC) for this category. In fact, these banks, both based in Toronto, received the highest ratings of 9.2 and 9.0, respectively, in the reputation category.
“It comes down to the [bank’s] reputation, image and the ethics,” says an RBC advisor on the Prairies about the most positive aspects of working at that bank. “I believe that our compensation is based on providing the right products and services to clients – and we have integrity.”
“[Clients] are not numbers,” adds a CIBC advisor in Ontario. “I can sit with them and help them form their goals. [Sales targets] are not the main reason for being here; helping clients is.”
This approach, far from being restricted to the banks with the highest ratings, was cited by advisors with every bank in the survey as the factor that helped them weather the controversy or to answer questions about their bank’s priorities.
“Overall, [Bank of Montreal (BMO)] has a very positive reputation,” says an advisor in Alberta with that Toronto-based bank. “BMO is one of the banks that pushes you to do what is best for the clients.”
Although advisors across the board often admitted to having the occasional disgruntled client, they often chalked this up to the nature of working for such a large, profitable institution as opposed to being due to any specific structural issues with how their banks do business.
“[We] do have a good reputation,” says an advisor in Ontario with Toronto-based Bank of Nova Scotia. “Now and then, there are upset clients, but that happens.”
“When you’re part of a company that’s been around this long, there are going to be clients with good, bad and so-so experiences,” says an RBC advisor in British Columbia. “People will always form different opinions.”
In the case of Toronto-Dominion Bank (TD), the media reports about TD’s sales practices had a dramatic impact on clients’ opinions of the bank because it was the first bank implicated in the scandal.
“[Our reputation] has taken a beating from the [media reports] this year,” says an advisor in Ontario with Toronto-based TD Wealth Financial Planning, a division of TD.
Adds a colleague in Alberta: “We’ve been in the news so much.”
However, other advisors at TD were optimistic that the controversy was counterbalanced by their bank’s efforts to reach out to the communities the advisors serve at the branch level.
“I’m proud of the reputation that we have with our community involvement and environmental impact,” says a TD advisor in Alberta. “I’m proud of the fact that we fix our mistakes. We have the right tools and leaders.”
This focus on the close relationships among TD’s advisors, their clients and the communities the bank serves helped TD weather the bad press, says Rowena Chan, senior vice president of TD Wealth Financial Planning: “Our value proposition is about [advisors having these] dedicated relationships. Therefore, the reputation is not as impacted because of those very strong, solid relationships we build with the clients.”
Regardless of any bumps in the road advisors may face when their bank gets negative media coverage, they believe they’re equipped to look out for their clients above all, and that’s what leads to such a high reputation among their customer base.
“Everybody has different targets, but all of our focus is on the customer experience,” says a BMO advisor in Ontario. “It’s always about putting the client first, no matter what we’re doing.”