Finance Committee on June 12th, 2017

[Scott Wambolt]

A client comes into one of the banking centres, is speaking with one of our CSRs, and is a parent, let's say. He says, “We've just had another child and I'm saving up for my child's education”. The CSR might feel it appropriate to say, “Would you like to meet with somebody qualified to give you investment advice to make sure that you're saving appropriately for your child's education?”

[The Chair, Liberal, Wayne Easter]

Mr. McPhedran.

[James McPhedran]

No sales goals on a teller's scorecard, no cross-sell whatsoever.

[The Chair, Liberal, Wayne Easter]

Mr. Pilkington.

[Andrew Pilkington]

We don't ask our front lines to upsell, but we do ask them to seek advice opportunities. You asked for an example. I can give you an example where often a customer will come into our branch and say to a teller, “I find it really hard to save. I just can't seem to save.”

There's a couple of products out there. One of them is called “Simply save” whereby a teller can quickly enrol the customer into a product whereby every time they use their debit card, they actually save a small amount of money that will go to a savings account. Or there's a pre-authorized approach where they may say, “Put $10 or $20 a week, whatever, into a savings account.”

Those are some examples of the advice-based conversations that we look for people to have, for the customer's good.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Okay, I'll leave it there. I think Dan might have a question.

[The Chair, Liberal, Wayne Easter]

Go ahead, Dan, you have over a minute.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

We've talked a little bit about the ombudsperson or ombudsman, depending on which bank you're working at. My understanding is that the FCAC can receive a report from the ombudsman if there's an issue, or systemically where there seem to be a lot of complaints from a single bank. Do you feel that the current arrangement right now is sufficient? Some people have suggested that perhaps having an independent person or someone who isn't necessarily hired directly by the bank—just to create that arm's-length—acting on those complaints, might increase governance. What are your thoughts?

[Scott Wambolt]

There is an independent industry ombuds office. I think—

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I'm speaking about the one who works within your bank as the first line.

[Scott Wambolt]

Right, and we are pleased with the performance of our ombuds office. I think we make all of our clients and employees aware that it's available for them. It's easily findable on our website. It seems to be working fine.

I think we live in a very well-regulated industry. I think that in some respects we're the envy of the globe in terms of how our financial system has performed recently, and I think that goes to the credit of our regulators.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. McPhedran.

[James McPhedran]

The process to handle complaints I believe is effective. There are mechanisms within the bank to escalate if that's.... As I said before, the majority of cases are rectified in that manner, but there's also an opportunity to escalate beyond the bank if a client so chooses.

[Andrew Pilkington]

Yes, if we're looking to save time, I'll just say that we have the same sort of process as my competitor here. We have a number of levels, and if the customer is not satisfied, it will eventually go to an independent arbiter, who will give a decision. We'll abide by those decisions in good faith every time.

[The Chair, Liberal, Wayne Easter]

Thanks to all of you.

Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair.

Welcome, everyone.

This past weekend when I was back home in the riding, I had to go to the bank to pick up a new credit card, because I had lost one. It was a TD card. I picked up this pamphlet called “Coercive Tied Selling” that was right at the front counter. I was kind of surprised that it was there, and I was actually happy that it was there. It relates to section 459.1 of the Bank Act and what people can't do in terms of tied selling. I was happy to see that it was there and available for all the customers when they go to the counter to make an appointment—not to the teller but to the counter. I applaud that. It was interesting to see.

I understand the way a bank works. I worked at one for many years. I understand that there are tens of thousands of Canadians who work in banks. Their livelihoods depend on them, and for the most part, they do a bang-up job. Your customer service satisfaction surveys show that, but obviously a number of employees have gone to what's called “Go Public” and have communicated that they feel they're being pressured to meet sales targets.

On top of that, the FCAC, on March 15, announced that they would begin a wholesale review of business practices by the banks. I'm glad to hear you're co-operating as they do so. As a committee, I think we will look forward to seeing that report when it's issued.

Has the culture changed in the institutions in a non-written manner so that maybe customers sometimes don't know that they're getting a credit-line increase? Maybe that's not being communicated for a non-teller type of person in order to meet certain targets and so forth. Has that culture changed?

Also, with that, are there sufficient checks and balances—because that's what it comes down to—so that people are being rewarded, yes, but not at the expense of customers taking on undue credit risks and increased secured or unsecured debt? We need to ensure that. We need to ensure a safe and sound banking system, which we have in Canada. We came out of the global crisis unscathed, if I can say that, and we need to maintain those high levels of satisfaction with service.

So there's the culture and whether the checks and balances are sufficient. Let's go across the panel, please.

[Scott Wambolt]

Our culture is very clear on the tone that we're trying to establish, and that is really to put the client first, to do what's right for the client in every instance. The message could not be clearer from our CEO on down through the organization that it's about doing what's right for the client first. That's reinforced in our balanced scorecard, which is the primary directional aid that our employees look to in order to understand how they are doing relative to the expectations of the organization.

There are a number of checks and balances in place in the system to make sure that if an employee or a customer feels that something inappropriate has happened, they can raise the issue through a number of different channels, including completely confidential channels.

[James McPhedran]

Similarly, I would say that in the last three years or so our aggressive shift to a more intense focus on customer focus has been clearly communicated through our network. Our people love it. They love this empowerment to look after customer needs. It's very clear, as is our code.

In terms of the checks and balances, our framework is sound. I think any sound framework has diversity to it, so it has checks and balances at the local level, the national level, and through customer feedback loops.

That said, we're hearing stories, so it's an opportunity for us to reconfirm and to see what we can do even better, and that's exactly what we're doing.

[Andrew Pilkington]

Thank you.

We're always developing our culture. The world around us is changing pretty quickly, but one common thread for decades now at TD has been the customer. The customer is at the centre of everything we do. An example would be the number of hours we're open. We're a very customer-centric organization.

Our CEO and the senior leadership team over the last year have developed a new framework for what we are calling shared commitments and have shared it with the entire bank. It has five key foundations. The number one foundation is “think like a customer”, so that's very much a part of the fabric of what we do at TD.

From a checks and balances perspective, you've heard a lot about the checks and balances we have across all three banks. We think we have very robust processes here, but we're not being complacent, and we're not saying we're perfect. I think there's an opportunity now to look, as I mentioned earlier, to tighten up, and to make the appropriate tweaks and adjustments so that we make it even stronger.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Can I—?

[The Chair, Liberal, Wayne Easter]

We're quite over your time, Francesco.

We'll go to Mr. Dusseault for a couple of quick questions.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

I would like to go back to the issue of sales targets which, in my opinion, are more in the shareholders' interests than the clients'. In your respective banks, have employees been fired because of their poor sales performance?

[Andrew Pilkington]

I'll answer that question first.

We would never put an employee on a disciplinary procedure just for failure to hit a sales target. We don't do that.

[James McPhedran]

Similarly, our targets are balanced, and the way we look at employee feedback is balanced as well.

[Scott Wambolt]

It's similar for us too. Any decision to terminate an employee would be taken very carefully, and we would consider it very thoroughly. Sales targets would not be the sole reason an employee is ever terminated.