If you have been watching the news, you may have heard the reports about sales targets at Canadian banks conflicting with consumer needs. After months of reporting, the FCAC (Financial Consumer Agency of Canada) was triggered to complete a review of the codes of conduct and best practices of large banks to determine if there was indeed a discrepancy between sales goals and what a consumer might truly need from their financial institution.
The FCAC conducted their review from May to November 2017, and they have now reported their findings. The financial institutions under review fully cooperated with the investigation, and the general findings are that, due to increased focus on sales and financial advice opportunities, as well as improvements to technology, the financial institutions’ ability to keep up with mitigation of rule breaking and best practices has been outpaced.
“The FCAC’s central finding from its investigation is that the predominant focus in retail banking is on the selling of products and services rather than appropriately prioritizing the interests of financial consumers,” said Frank Allen, Executive Director of the Canadian Foundation for the Advancement of Investor Rights, in a press release.
Recommendations by the FCAC include the establishing of formal frameworks to oversee sales practices, better oversight of consumer complaints, and different compensation strategies for employees geared towards the interests of consumers. You can find more information about the FCAC’s investigation into Canada’s largest banks in this CBC article.
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