Boss Blog: March 29, 2017
Who is your Friend??? Not the Banks!!!
Welcome to my weekly article: Boss Blog. After recent events, I feel compelled to voice my take. CBC recently reported a “shocking” exclusive about TD bank’s employees. They said they looked at their clients as “prey.” Prey for what you might ask? These former tellers told how they were given incentives to push product on everyday bank customers. These products included everything from overdraft protection, lines of credit and investments. That doesn’t sound too bad right? Wrong! They promoted these products even though they knew it wasn’t in the customer’s best interest. What does that mean you ask? I have had friends in my life that have gone through depression and I don’t hand them a bottle of pills. I also have clients with debt problems and don’t offer them a Line of Credit. My post today will be about that particular expose and why the banks are not your friend.
I will first discuss my personal experience with the bank. I will mention that I am not knocking bankers. I have many friends that are bankers and they do great work and are very nice people. What I am speaking of is the bank itself. The mechanism of the bank is purely for profit. For years I have been going to the bank to make a deposit and they propose absolute garbage products on me. Excuse me, do you see my balance, why would I need overdraft? One instance really sold me on how terrible the bank is. Oddly enough it happened while I was having a drink with a friend on a Tuesday afternoon.
I received a random call from TD bank while I was sitting with a friend in downtown London. The representative mentioned that we should do 3 things to make my banking experience better:
1) Change my regular savings account (of which I had a good amount of money in) into a super savings account. This would make my interest rate jump from 0.05% to 0.55%.
2) Upgrade my credit card from Aeroplan Platinum ($4500 limit) to a better Aeroplan card ($5000) limit. Doing so would give me 1.5 Aeroplan miles per dollars spent versus the 1.0 I currently receive per dollar.
3) Talk about TFSA’s for the large amount I had in my savings account. Get me invested and making some money off my money.
All of these topics seemed very reasonable and helpful so I decided to go along with it and hear them out. Upon arriving there I was sadly disappointed. I couldn’t upgrade my credit card because I didn’t bring the last 2 years T4 slips. I would have brought them if I had been told to. I was told I didn’t need to bring anything. They also know what I make which puzzles me. I also couldn’t discuss TFSA’s with the agent I spoke with because he wasn’t licensed. He suggested that I book an appointment with an advisor in the future. Excuse me, you called me here….
The only thing we could accomplish out of the 3 items was “upgrade” my savings account to a super saver account. So now I have the “amazing” interest rate of 0.55%, a number that doesn’t even keep up with inflation. Oh and by the way, I transferred money from that account into my chequing account at Christmas time and got charged $25. Apparently, it is a “no transaction” account. WTF is the point of an account you can’t get money from without a fee. I immediately switched out of that account back to my old one. (The $9.16 a month in interest gains on my 20K of savings wasn’t worth it).
So what did we get done that day? Nothing! Oh, wait I’m wrong. We did aggravate me and waste my time. I bring this up for the specific reason that you have to know that the banks are not your friend. Never have been, never will be. All those commercials with people smiling on their green couches are just straight bullshit. Every single day the banks make over $7 million in fees. That’s the $3 you paid for using the wrong ATM and the $25 they stole from me. Beyond that, you pay penalties for every move you make all while they make money off your money. The person helping you with your investments is working as a teller next week and at the call center the following. One TD teller tried to sign up a friend of mine with an RRSP. This friend has only $500 in her chequing account and makes less than 20K a year. That’s service baby!
I will admit I’m biased but my opinions are based on facts and experience. You can always ask yourself this question: When was the last time the bank truly helped you with anything? Even better, why is it that even during economic downturns they still make profits? That is because their success isn’t based on your success. You are rich, they make money. You are in debt, they still make money. That’s pretty crummy in my opinion. I pride myself on helping my clients become successful. When they win, I win. Still, don’t believe me then you can read an article from one of my favorite experts, Gail Vaz-Oxlade. In it, she describes that they are not your friend, and also not your enemy. They are a business that has to meet sales objectives and are beholden to their shareholders. Just Google “the banks are not your friend” and you will see some very interesting articles on the subject. I think of the bank as a service that I control and utilize. I don’t get bullied by them and I don’t fully trust them. I see them for what they are and so should you. Demand that kind of service and care, you deserve it!
Thanks for reading this week’s edition of Boss Blog. I have attached the link below to Gail’s article. Also below is a link to my article about Fiduciary Responsibility. See you next week friends!
http://www.torontosun.com/2013/07/10/your-banker-is-not-your-friend
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Joseph James Francis is a Financial Advisor. You can find him on various social media platforms and at www.budgetboss.ca.