"Retail Banking Sales Culture May Raise Risks For Consumers" (Financial Consumer Agency Of Canada)
There it is friends: the institutions that you have come to believe in and put your trust in are relentlessly trying to take advantage of you.
"Retail banking culture is predominantly focused on selling products and services, increasing the risk that consumers' interests are not always given the appropriate priority"
The culture of growing the bottom line with fees and commissions on the backs of their clients wealth is very simply, a conflict of interest.
When the independent financial advice firm where I worked (as a branch manager and advisor) from 2005 to 2011 was taken over by a bank, we (myself and my colleagues) went from a client-first culture to a shareholder-first culture: were told in no uncertain terms that the shareholder out-ranked the client. Of course: client fees went directly to the bottom line and eventually to the dividends paid out to shareholders and the CEO was rewarded when the share price of the bank went up.
for example:
Wealth Management:
- Net income totalled $120 million in the first quarter of 2018, a 21% increase from $99 million in the same quarter of 2017.
- The 2018 first-quarter total revenues amounted to $441 million compared to $397 million in the same quarter of 2017, a $44 million or 11% increase driven by growth in net interest income and in fee-based revenues.
If the conflict of interest here is not obvious, I am not sure what is.
Fiduciary responsibility to clients cannot be present when the clients interests are not put first and foremost.
At High Rock we have a Voluntary Code of Conduct that very specifically outlines our dedication to our clients interests. You will not find this in the culture that is outlined in the Financial Consumer Agency of Canada's report.
Every week we see the "aha!" moment when a new client signs on and experiences the vast difference in culture that we offer. We are not commissioned salespeople, we are a portfolio management company with expertise in financial planning, wealth and portfolio management.
Of course we charge a fee, but we would challenge that our fees are at the low end of the spectrum and they are absolutely transparent.
We have exactly the same safety features (Canadian Investor Protection Fund, CIPF, through our Raymond James Correspondent Services custodian) that you would have with a bank.
As I say over and over again, there is an alternative to the traditional bank investment advice offering and we (my business partners Paul and Bianca) think that what we offer is head and shoulders above the rest: low cost, fiduciarily responsible, personal and family wealth and portfolio management with high levels of service and communication.
Nothing to lose, all to gain.
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