Bankers are not there to help us, they are there to sell us products

Our lives are much simpler because of the existence of banks. They hold our money in secure places and they allow us to have access to that money almost 24/7. In addition, they lend us money to finance things such as housing, autos, or buy a drink at a bar.

Could you imagine living without the services of a bank?

Our employers would pay us in cash, and we would have to stash that cash under the mattress. At the end of the month, we would have to go to the electricity and telephone companies to pay for our bills. Life would be so difficult without the service of a good banker. Bankers do a good job interconnecting all the money transferring apparatus and they deserve to be compensated for making our life so much easier.

Considering how important banks are to our everyday comfort, we can easily believe that banks have our best interest at heart, that their best intentions are to provide assistance, help, advice, or guidance to improve our financial lives.

But that is not true. A banker’s priority is toward its shareholders, towards its customers. The bank’s main purpose is to grow, to increase sales, and to pay dividends to its shareholders.

Some banks have discovered that the best way to grow is to treat their clients with respect and provide them with satisfactory services in exchange for their loyalty and money.

But others have gone the other way, they have pulled every persuasion and manipulation trick in order to extract as much money as possible from their clients. A few have committed fraud.

Here is an example. The bank Wells Fargo, in the U.S., created 3.5 million fake accounts to be able to charge unsuspecting clients for services they didn’t ask for. At the same time, the bank was misleading shareholders with business growth that was not there.

But that’s an extreme case. In most cases, hundreds of banks across the United States and Canada, gently nudge millions of clients into using products or services that they really don’t need.

Examples of bankers milking their clients

1. During the RRSP season, banks spend millions of dollars on advertisements. When a client comes to the bank, a “financial adviser” (a financial product salesperson) offers mutual funds with high expense fees. They never offer mutual funds with low expense fees. Many times these financial products are inappropriate for their clients.
2. When you go to the teller to do a regular banking transaction, the teller often offers the latest credit card, even better than the one they offered last year, or only a few months ago. These credit cards are designed to make us spend and borrow money at high-interest rates.
3. I get prompted all the time to borrow money to buy a car, to renovate my house, to buy investment products. Often time, the best advice would be to pay off my debt, but there is no money in paying off debt for the bank, so they would never suggest it.
4. I get prompted to increase my credit card limit
5. I get prompted to increase my line-of-credit limit.
6. I get prompted to buy insurance products and to sign papers confirming that I refuse to buy insurance products.
7. I get prompted to switch to a different checking account with a higher service fee or higher minimum balance
8. I get sold checkbooks with over 100% markup from many other office supplies stores.
9. I times I have found fees for services I never subscribe to or subscribe to services I never asked for.

Examples of banks offering compensation to employees based on sales

The employee compensation varies from straight salaries to straight commission and everything in between.

Those employees who are compensated with salaries, they get promoted based on the number of new accounts they open, the increase of mortgage lending, the increase of credit card issues. If there is no increase in any of those metrics, there is no promotion. In short, even if the employee is not directly compensated with commissions, his future salary and career depend on the increase in sales.