Bank Financial Advice is Worse Than People Realize

Millions of Canadians get financial advice from Canada's big banks, but bank financial advice may be doing more harm than good.

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[rob]

Just walked into my Canadian bank and asked for financial advice. They handed me a list of CD options, a mutual fund brochure, and a t shirt that says 'I helped hit our sales target!' So... I'm feeling pretty financially savvy now

[KasperPlougmann]

In Denmark I've stopped asking for advice in the banks. I always end up educating the employee, rather than getting anything useful from them

[ravbarring]

Getting advice from the Bank is like asking a McDonalds employee what’s best for losing weight and staying healthy. Banks are in the business of issuing debt.
Banks and fast food restaurants are in the same category.

[umbertopappalardi]

I remember going into one of the largest retail banks in Germany and saying „I have 500 EUR left every month, what can I do with them?“. The advisor offered me a rip-off contract with crazy fees calling it an „investment“. But he was simply selling me products instead of giving me a financial advise. The crazy part is that he avoided the topic about ETFs completely. I asked him „What about ETFs?“ and he always changed the topic without really going into detail and answering my question. This was before I knew anything about ETFs. Imagine how many innocent citizens become victims of the so called „financial advise“ in retail banks.
This kind of counseling should be illegal, in my opinion.

[ironcito]

This is hardly exclusive to banks or to financial advice. It applies to anything from car dealers, to real estate agents, to store clerks, to lawyers, to contractors... anyone trying to sell you anything. It's not always done with malice, either, it's just that they have an incentive to sell, it's how they make money. There are exceptions, but caveat emptor is a good rule of thumb.

[defpotec]

In Canada, the term "financial adviser" (with an "e") is regulated and limited to fiduciary professionals. The banks employ "financial advisors" (with an "o") to provide misleading sales pitches to customers who believe they're being provided impartial advice. You couldn't make up a slimier story if you were trying to make a joke about how mendacious these banks are!

[someguycalledcerberus]

I remember when I was closing down my bank account.
Right next to me was a guy opening a bank account (apparently neither warranted a separate office), so I got to hear all the details. The man was an unskilled worker, lived with his parents in his thirties, had a high school diploma, made about 40% of the national median income, and was trying to open an account with this bank, because his existing debit card with his current bank was just swallowed by an ATM.

The bank clerk convinced him to get a credit card. The only reason he was unable to, because it turned out he's on a list for owing his previous bank

[Kirmo]

Ben Felix video? I click no matter what

[mr.financial]

Ive received bad advice from:
banks, insurance companies, asset managers, private wealth managers and and and.
The moral of this story is to remember who all these professionals are working for. Essentially, they are salesmen, with one job, to sell their services and products to us.

[tachiiderp]

Im a health care professional and one of my patients, who's in their 70s, was instructed by a cibc advisor to sell covered calls. Literally makes no sense since she doesn't even own any shares to begin with.

[fredatlas]

I use a building society here in the UK, they claim to be a mutual society. They're not a bank, plc company. So some yrs ago when they said I could get free financial advice and offered me an appointment, I went along. But it turned out all they wanted was to try and sell me products I didn't need or want. They just tryed to sell me insurance policies. No real financial advice, no useful advice at all

[GreatIaker]

The main investing advice given by bank advisors is to buy investment products that have high fees and pay big commissions. Those commissions slowly convert the investor's retirement savings into the advisor's retirement savings. In investing, you get what you don't pay for.

[ColinJ]

"You can pause your mortgage payments during COVID. "We'Re HeRe tO hElP" Meanwhile, interest continues accruing.

[somersby]

I was told the same thing several years ago at a bank. When I told them I would think about it and study up before deciding they kept emailing me for follow-ups to the point that it became pushy and made me suspicious so I declined and went my own route, and your channel was a big help.

[LoganT]

If you’re not paying a fee for your advice you are being sold something. Bankers don’t work for free and good advice usually comes at a cost.

[robertross]

When I finished University and wanted to start investing I was sold a mutual fund with a 9% front-end load. No wonder the guy paid for a round of golf. It didn't take long for me to figure out I was being ripped off. Years later I took the Canadian Securities Course and now manage my money. I now buy asset allocation funds, dividend-paying stocks, and strip bonds. My fees are low and my returns are decent. Now that I am retired, I may hand over my money to an advisor who recommends low-cost ETFs or just put all my money in asset allocation funds and move away from individual stocks. Time will tell.

[sallena]

This is a fairly timely video. We hired a financial services firm and realized how much our bank was charging us in fees and bad advice. The cost was steep but the savings and knowledge from our financial advisor was well worth it.

[gothere-itis]

That's one of the reasons I left my job at a bank in my country...Employees are forced to sale products so the bank can pocket high commissions. And the worst part: most employees don't even closely understand how these products work! They rely on the ignorance of the client and manipulation.

[jamesodell]

I don't consider these people to be financial advisors, I call them sales persons. A true financial advisor has training and knowledge in personal finance. They give advice tailored to the individuals needs, not what gets the advisor a fat commission.

[jb_makesgames]

Great Video - as a retired Cdn Banker I fully agree with your comments and findings - it is all quota based. Banks are like casinos, easy to get into but hard to get out of. Re money management, most of Canada's largest money managers are owned by the banks. The few independent managers have to compete against giants. I purposely choose a independent manager for this very reason.