Followers of US bank will be aware of the ongoing scandal at Wells Fargo - the bank has been found to open for its customers millions of unauthorized accounts which was earning banking fees without their knowledge. A summary of the Wells Fargo Scandal can be read here.
Chasing Sales Target
This is one of the biggest "dilemma" of the financial industry - many employee's KPI is measured against the sales target they bring to their employers. This means having to get new or existing customers to buy new financial products; however, if these financial products offered by banks are that good, why will they even need a sales target in the first place? Consumers would have flock to banks to grow their wealth.
Hence, to me, I can conclude many of these financial employees are pressured to meet sales target, pitching products to their clients, which may not be the best financial option for the consumer but definitely benefical to their employers and them - a conflict of agency interest. This seems prevalent across the financial industry and something has to be done.
That is why the financial blogging circle here have been actively highlighting how there are simple products like term insurance or the SPDR STI EFT which serves the financial consumers better; the irony is that many of us financial bloggers don't get sales commission pitching for these plain vanilla products! And we don't get paid for delivering sound financial advice....
Given the "sales target" chasing culture of the financial industry, I have not been quite trustful of bank's sales employees whenever they approach me at the branches. I am aware banks are more interested to make money out of you. Until the conflict of agency interest is resolved, it is important for us, ordinary financial consumers, to grow our own level of financial literacy through reading and using our own common sense. After all, no one cares about your money, more than yourself.