My bank doesn’t listen, and neither does yours

One man’s observations in an industry run like the Wizard of Oz.

I should preface this: I sold my house. My 6-digit account balance was like bacon to a hungry redneck.

One day, my credit union (a schedule 2 bank) begged me to allow their accounts manager to put together something for me. They just wanted to show me what they can do for my savings they said, build a portfolio that would meet my needs. Being mutual fund licensed myself, I allowed it out of pure curiosity, I wanted to see it from a client’s perspective for once.

I wasn’t disappointed… in the train wreck.

After trying several times to force my appointment to their preferred dates and times, they eventually relented to my stubbornness, and agreed to meet when I was free. I had frequented the place enough to know they were rarely busy. They are not doctors with 3 day work weeks, they don’t have bloody patients rolling through the double-doors every few minutes, they could meet on my terms quite easily. It’s a tactic they use to put you in the inferior position.

We sat for over an hour talking, it was a small office for a senior accounts manager, and I used my posture to give us some distance. Leaning back is a passive aggressive stance, useful if you want to pressure the other person, lawyers and bankers do it all the time, I was just returning the favour. I think it unnerved him in hindsight.

He began with asking why I was there, to which I pointed out the obvious, they had asked me originally, but perhaps he didn’t know. We talked about many things, most of which were irrelevant, no doubt to build rapport. He scribbled in his binder a handful of lines over the session, before finally handing me forms to fill out, to get to know me.

The net result of the questionnaire was learning that I am comfortable with risk, and therefore an aggressive investor. This was relevant.

Scheduling my next appointment was equally combative, I told him when I would be free, he told me when to come see him. We weren’t making progress. Eventually he explained that he would be unavailable at the time I chose, but I continued to dismiss his attempts to reshuffle me. It was like trying to negotiate with a talking Elmo doll.

Finally after an uncomfortable silence, he solved the impasse by suggesting his colleague would fill in. Yippie!

Upon my second visit, I was confronted by two representatives, one was obviously the trainee, the watchful other being sensei. The one I had met with previously. The one who claimed would be unavailable, was now mysteriously available. I guess I was worth it?

Now it was the trainee’s turn. The trainee proceeded to extol the virtues of his process, and recapped some of the unspecific questions they had asked previously, “what do you need money for?” was a fine example. After this, the sensei jumped in to explain which anal probe he was planning to insert into my… money.

It started quite reasonable sounding, a slush fund of 15% of the capital, specifically for business costs, held in their standard 1.9% interest account. Easy access, no fees or delays, so far, so good. Then 25% of the capital was to go into their online savings account, earning a whopping 2.1%, with the added excitement of yearly fees! This is when I started making notes, clearly they hadn’t listened to my answers. Then a further 30% was to be invested in various 3-5 year term deposits, earning no more than 4.6% at the time. Super.

Then, just as I was feeling a stroke coming on, sensei handed the reigns over to the trainee. The well dressed gentleman, by now very concerned at my apathy, made a renewed push to capture my attention. Mutual funds! Yay! But within 2 minutes, my apathy had come back, he had taken a big fund company’s managed portfolio bundle, where they have 5 options to choose, one for each risk profile, and selected a less aggressive portfolio than I should be in.

This is when it really hit me like a drunk driver, it’s not only that they don’t listen, they have a mental block, or run on auto-pilot. Even after satiating themselves with thoughts of hefty commissions from 70% of my capital, they were simply unable to choose aggressive investments as my risk profile demanded.

The only written plan I received from the whole process, was an empty sheet of paper with a few balances and percentages scribbled in the top left corner. And then, as if they had a sudden jolt of hubris, they handed me some forms to sign to get started.

The slightly morose, and bewildered looks on their faces as I left was priceless.

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