Ex-banker tells all

Ex-banker tells all

Ex-banker tells all

An ex-banker turned fee-only financial advisor dishes on what it was like to hock mortgages to clients and the pressures to cross-sell.

“When I was in the bank I was incentivised to sell (its products), that’s how my performance was evaluated,” Sandi Martin of Spring Personal Finance said on Canadian Mortgage Hangout TV. “Even though I really wanted to serve the person across the desk from me as best I could and give them the best, unbiased advice… a little voice was telling me ‘but you’re going to have to tell your manager that you couldn’t sell them another Visa card or whatever.’”

Really, the goal of an in-house mortgage specialist at a big bank, argued Martin, is to ensure the client is sold as many products as possible, essentially  a strategy that often forces advise to take a back seat to selling.

“The more depth you have in your client profile, the more money you can make off of them,” Martin said. “Once you have a mortgage and a transactional account, if you can add one more thing – like some kind of investment – the branch feels like it’s really got its client in position.”

This may come as no surprise to mortgage brokers and other independent advisor who started at the banks. Many now touted their ability to provide unbiased advice as a major selling point; but one thing they may not have considered, suggested Martin, is the role of each individual branch in driving cross-sells.

“(Mortgages) are very profitable for the branch… the real competition for mortgage brokers is the person in the branch office down the road; that person is really concerned with how many mortgages, new money to the branch a mortgage can bring them,” Martin said. “(They) want to be identified as the primary bank – so that includes having a checking account, having a savings account, having your RRSPs, having your mortgage, having your line of credit, your unsecured car loan.”

And perhaps most interestingly, Martin revealed exactly how she tried to pry business away from mortgage brokers.

“When I was in banking, if someone would come into the branch – I’ll just kind of give you my spiel, what I used to say to clients, as a responsible bank employee who really wanted their mortgage dollars,” Martin said, recalling her script. “‘Mr. Client, I understand that they can give you 25 basis points and that’s fantastic; I would love to do that for you. But what your 25 basis points is going to buy you here and the bank: I’m here all the time.

“’If you have a problem, it’s my mortgage. I can call my back-office, I can give you service. Once a mortgage broker sells you that mortgage they’re done with you – they’re not going to give you any service, they don’t care about you; you’re the next client out the door for them.’”

Martin delves much deeper into the psyche of a bank employee on the 45 minute segment. To watch the entire episode, click here.

57 Comments
  • John Dearin 2013-10-25 9:35:02 AM
    I hope Sandi holds herself to a higher moral standard now than she did with the bank. Just glad she is not in our business with that reputation
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  • Jon 2013-10-25 9:38:00 AM
    I went to Sandi Martin facebook page, blog and could not find any mention of what qualifications that Sandi has to show that she warrants being paid her fee. $1100 dollars is a lot to spend for a few hours with a $550 annual review. From what she says, what can she provide that you couldnt get from a library book for nothing?
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  • kac 2013-10-25 9:58:04 AM
    as a former employee of one of canada's largest credit unions i was paid on a commission basis to renew the best clients at higher rates than was offered to new clients,i see this happening now with a couple chartered banks especially after the tightening of mortgage rules where the consumer has less options.I also on a regular basis was rated performance wise to sell the credit unions life and disability insurance on personal loans which was very expensive and in a lot of cases not needed. I was basically told that the clients could not have the loan unless they signed up for life insurance and disability coverage. I am aware this is called tied selling which is not permitted and this happens on a regular basis with FI's today. It is unfortunate there is not a party willing to address and put an end to this with FI's as it certainly isn't in the clients best interests however seems the regulators are not interested in looking after the consumers rights when it comes to this.
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