# CBC: Hidden cameras reveal dodgy financial advisers



## Taraz (Nov 24, 2013)

http://www.cbc.ca/news/business/hid...ncovers-atrocious-investment-advice-1.2553560


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## Rusty O'Toole (Feb 1, 2012)

Another conspiracy theory confirmed. It's getting so I have hardly any left to hang my tinfoil hat on.


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## Squash500 (May 16, 2009)

I'm not surprised. About three years ago just for fun I went into an Edward Jones branch in Toronto. The advisor wanted to charge me $300 commission to buy 200 shares of the XIU and $300 commission when it came time to sell the same 200 shares of XIU. I could buy and sell 200 shares myself for a total of $19.98. Primerica is also a total scam (it's like a pyramid scheme). If you're a Primerica rep then you get extra bonuses if you recruit your friends to take a mutual fund course and then work for Primerica as well. Primerica sells mutual funds with MERS north of 3%.

IMHO most of the financial advisory services industry is a total scam. That's why I'm glad that I'm a DIY investor.


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## wendi1 (Oct 2, 2013)

The industry has got to take steps to police itself. I'm sure there are lots of great financial advisers out there, but who can bring themselves to take the time to sort out the con men and BS artists?

It's like a restaurant - if you had to personally inspect the kitchen and measure the temperature of each fridge in each restaurant you wanted to eat at, there would be fewer restaurants, and more people carrying peanut butter sandwiches in their purses...


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## Ihatetaxes (May 5, 2010)

Watched this last night on Marketplace. Loved the two Advisors who told her that mutual funds only charge their fee on the profit you earn. Also the guy from Dundee who told her she could expect to make $20,000 in the first year on her $50,000 investment as a conservative investor. 

Best part was when she got busted by someone who asked her why her pants were glowing (batteries from the hidden camera I guess).


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## hystat (Jun 18, 2010)

good episode. I have seen some bad advisors, but wow. The ones who had no idea how MER's work were scary. 
Zero training, Zero testing of staff and reps. Scary that someone would be in that job and have zero interest in reading a basic book on investing or showing any initiative to educate themselves. 
You can point fingers at the institutions, but this is just more evidence of the level of performance you get out of Canadians. 
You put me in that job, and I don't care how little training you give me - I'm going to go pick this up and read it on my lunch breaks. 










or even just read the newspaper. You would almost have to try to be that ignorant.


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## kcowan (Jul 1, 2010)

What I found lacking was a summary of what they found by organization. It seemed that they jammed in a filler segment so as not to aggravate the industry. I think I caught Dundee and IG but was pretty fuzzy about the other majors.

The Dundee guy ought to make it to youtube (Marketplace is not available outside Canada online)
http://www.cbc.ca/marketplace/episodes/2013-2014/show-me-the-money


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## humble_pie (Jun 7, 2009)

i thought scotia was mentioned in the trailer? the representative saying that 15k returns, 20k returns are possible from $50,000 investment?

i'm very sympathetic that the media would never prepare for publication a summary specifying the foibles of a few institutions though. The misrepresentation is undoubtedly widespread across the entire industry, so a partial table naming only a few financial groups could be grounds for a lawsuit. I thought the producers did well, showing enough evidence to alert the public that big problems are present while skirting the line of legal fire for the time being.


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## donald (Apr 18, 2011)

Commision based,never going to change with how advisor act for themselves above the ''clients"(they make a fee off the mer no?)
rsp season comes advisors see green in their eyes and it is for them!
Complain all you want but that is sales-never going to change.....how is it any different than any other sales professional
And they other half is the marketing from the big 5(you know that nice folder they give you with the nice graph shooting straight up and the George Clooney lookalike on the sailboat that is going to be ''you''
''Your richer than you think"


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## cainvest (May 1, 2013)

I've met with a small number of FAs (and FPs) over the years, mostly there with friends to watch out for them which I'll be doing again next month. I've never seen issues as bad as the ones shown here but I'm not surprised either, you'll always find some that are just plain bad.


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## Taraz (Nov 24, 2013)

The TD one I saw last year (out of curiousity) didn't seem particularly knowledgeable about personal finance, taxes, or investing in general. I can't remember if she actually said anything unrealistc about returns.


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## OptsyEagle (Nov 29, 2009)

That is pretty sad, but I suspect they cut out a lot of footage of some advisors explaining the fees properly, suggesting conservative growth rates and maybe even some well thought out advice and suggestions.

They say the industry is lightly regulated and although all that is in the eye of the beholder, when compared to the regulation of the guy that is about to replace your roof, fix your toilet, sell you a car or offer you a new smart phone package, I think the differences are pretty apparent.

You will find creeps, crooks and idiots in all walks of life. You need to know that, and have a plan on how you are going to screen them out of your life.


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## kcowan (Jul 1, 2010)

donald said:


> ''Your richer than you think"


Watch it! You are exposing yourself to a lawsuit from Scotiabank.

Maybe we should mount a campaign called "You're poorer than you thought!"

Here is one guy who is trying to make a difference:
http://www.youtube.com/watch?v=KH6XMXlfdBw&feature=youtu.be
and all the youtubes by Larry Elford are worth watching. Check out his website:
http://investoradvocates.ca/


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## dubmac (Jan 9, 2011)

humble_pie said:


> i thought scotia was mentioned in the trailer? the representative saying that 15k returns, 20k returns are possible from $50,000 investment?


I think I recall seeing that Scotia "suspended" the advisor that you are referring to above HP. Any "advisor" who suggests that they can get 30-40% returns is full of it IMO.
Out here in the warmer west, TV and media have been pushing ads on TV warning seniors against investment fraud. Some may have seen these ads on TV http://befraudaware.ca/


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## fraser (May 15, 2010)

People who think that the bank is their friend are delusional. 

They are in business to squeeze every possible dime from you. And they like to hide fees from you as much as possible....as much as the Government likes indirect tax.

Canadians are so trusting of their banks. Just one reason why I like Canadian bank stocks so much!


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## Taraz (Nov 24, 2013)

fraser said:


> Canadians are so trusting of their banks. Just one reason why I like Canadian bank stocks so much!


Agreed. If your sole financial strategy was to buy stock in the big five banks, you would have done quite well over the last decade. The dividends are pretty comfortable.


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## donald (Apr 18, 2011)

Oeagle,i think there is a big difference though comparing say a plumber to a (fa) advisor!
People generally don't even know how the advisor is getting paid,whereas people are straight off on guard with a plumber ect,feel very comfortable getting quotes/asking for a breakdown/calling other companies,getting referrals ect.
Most people are flat out intimidated with Anything bank related(social conditioning).......the cap in hand,defer and don't ask question ect.
They lead you into the office and have you sit in a small chair across from them and the ''oak'' desk and show you all sorts of pretty compounding graphs,in between talking about the maple leafs or some crap like that!
Who are you to question the advisor?it is all ''spanish'' and i would bet over half of the mutual fund public think the fa is a econ grad or something!
''honey how did your meeting go with carl @ xbank?good honey,i think we are on the right road,carl even has us in some europe fund,he is a smart guy!"
Meanwhile back at the office.....carl's boss-''hey carl,good numbers on those series b funds!,listen next friday you want to join jim,frank and i on the links?i talked to cindy already,your good to go!,keep up the good work!great rsp season bud" lol


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## OptsyEagle (Nov 29, 2009)

Still waiting to hear what the differences are.

All that goes on in other industries, with at least some of the various players working in them.

I am not trying to give the industry participants a halo. Personally I would say the only main difference from every other industry is that the dollar values are usually a lot larger in financial management and that the bad apples that get into the advisor business tend to have a lot longer longevity then in the other industries. Except car sales. All those guys are crooks ... or they would have been fired in their first 4 weeks. In the advisor world, they will let you keep your job if you're an honest, straight shooter, as long as your sales numbers can keep up with the dishonest liars and scammers that are in the same office.

The good news is that for the many advisors I knew, they can build a pretty good business giving good honest advice. They unfortuneately will get tarnished by ugly bear markets from time to time, that are not their fault, but where bad experiences, by clients are inevitable. It's hard to escape those without some blame, no matter how honest and good intentioned, you are.


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## MoreMiles (Apr 20, 2011)

donald said:


> Oeagle,i think there is a big difference though comparing say a plumber to a (fa) advisor!
> People generally don't even know how the advisor is getting paid,whereas people are straight off on guard with a plumber ect,feel very comfortable getting quotes/asking for a breakdown/calling other companies,getting referrals ect.
> Most people are flat out intimidated with Anything bank related(social conditioning).......the cap in hand,defer and don't ask question ect.
> They lead you into the office and have you sit in a small chair across from them and the ''oak'' desk and show you all sorts of pretty compounding graphs,in between talking about the maple leafs or some crap like that!
> ...


Your post made no sense.


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## OurBigFatWallet (Jan 20, 2014)

I watched this the other night. Great show. Hilarious when the lady got busted with the hidden camera (glowing pants). It always surprises me how trusting people are of their banks. As a shareholder I think it's great but as an investor if someone told me mutual fund fees only relate to the earnings made in the fund, and not the original investment, this would be a red flag telling me they don't even understand the basics of a mutual fund (either that or they're flat out telling lies)


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## Nemo2 (Mar 1, 2012)

MoreMiles said:


> Your post made no sense.


I tend to disagree......as Donald indicated, there (in all likelihood) is a certain amount of deferring to those (often incorrectly) considered 'professionals', perhaps especially amongst those unfamiliar with being in the offices of major corporations such as banks and insurance companies.

Said neophytes can be inordinately impressed by flow charts, power point presentations, (am I showing my age?), and the like...(which, of course, is why they're utilized)........and simply latch onto key words such as 'returns', whereas they might question a plumber in coveralls.


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## donald (Apr 18, 2011)

my point is its easy pickings because of:social conditing/mass marketing/lack of choice and age!
The process is way different than a one time purchase or purchases made when one is aware there being sold to!
How old is someone usually when they open up a rsp at the bank?18?19?20?....are they generally being told by there friends/family about how the industry works?they get the clients young and along with the marketing machine that is the big 5 come rsp season(throw the government in there as well)the structure is set.
Only way to derail it is if one on there own learns financial literacy and it usually happens about 15 yrs later.
This industry is different than one buying a car.
most people are uncomfortable around finance and money like sex is taboo still to the masses.


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## Just a Guy (Mar 27, 2012)

I find it interesting that people are so offended about this.

These "advisors" probably have the wrong title. They are salesmen, most commissioned. Trained by banks to make money for the banks. Very few, if any, are financially successful. Why would anyone truly trust a salesman?

Of course, if you are successful, no one wants to hear from you either, as there's no way to transmit the information (if you write a book, people think you're just trying to sell a book, you have a seminar, same thing)...this board if full of attacks on people giving advice.

I often take my mentors out for lunch, to chat and pick their brains. I seek advice from those I know are successful. I'll promote the advice, book, course, whatever of those I think aren't trying to BS people...but I also ignore most of the stuff said by those with no practical success...

People want free advice...well, you get what you pay for.


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## uptoolate (Oct 9, 2011)

Just a Guy said:


> People want free advice...well, you get what you pay for.


Sadly this is so not true in finance. What am I getting for my money when an advisor puts me in a 5% DSC mutual fund with a 2% MER that has virtually no chance of beating an equivalent index fund over 5 or ten years. On the other hand, I paid nothing to get William Bernstein's 'Four Pillars of Investing' and Jason Zweig's 'Your Money and Your Brain' out of the library and read them, then set up a discount brokerage account and invest in appropriate e-series funds or ETFs. Very few commission based 'Financial Advisors' add value. The day that this industry agrees to a fiduciary standard and gets regulation with teeth is the day it deserves any respect. There are no doubt many very good and well meaning advisors but finding them among the many more not so good ones is a challenge.


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