Finance Committee on June 12th, 2017

[Scott Wambolt]

We take the allegations and issues raised through the media very seriously. We investigate any issue that comes forward, irrespective of how it comes forward, including social media or anonymous websites or through any number of our internal means. We take it very seriously. We have a number of formal and informal ways in which we can gather information. Similar to Mr. Pilkington, we are constantly out in our banking network meeting with our employees, trying to gauge and understand issues that are real to them. Issues that have come to light in the media have never been mentioned, not to me anyways, on my tours through the banking centre network, nor do they ever flash on our internal intelligent monitoring systems.

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

Can you list some of your formal and informal modes for getting this information? I'm particularly interested in the informal ones.

[Scott Wambolt]

I go to the banking centres frequently. I meet with employees and stand behind the counter with them to understand how the systems are working for them, to understand their mood, and to understand their attitudes. I often have time away from the front line with them in a meeting room or a coffee room, where I just ask them, “What's on your mind? What can we do for you?”

[The Chair, Liberal, Wayne Easter]

Thank you all.

You're next, Ms. O'Connell.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you, Mr. Chair.

Thank you all for being here.

I have some specific questions to your testimony, so it might not be all three on one question.

I'm going to start with Mr. Wambolt along the line that you just mentioned in terms of monitoring.

With all due respect, you're a senior vice-president, do you really think that when you're standing behind the tellers they're not going to act maybe a little bit differently when you're there than when you're not there? With that being the case, have you ever done any monitoring with mystery-type shoppers?

[Scott Wambolt]

Yes. Mystery shopping plays a big part in our program. We highlight banking centres that score at the top, from our banking centre mystery shops, on a weekly basis. It's an active program. All of the banking centres know it's happening. They don't know that it's happening to them, but they know that it's an active program. They are very excited when they score and are mentioned for excellent service.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

What happens when they're not performing? Companies that hire these mystery shoppers, so to speak, have to set the terms, the types of questions, and those types of things. Have you actually had mystery shoppers go into your branches based on these sales tactics?

[Scott Wambolt]

The mystery shopper program is based on activities that we know get us towards our goal of being a leader in the client experience as well as activities that we know will most likely lead to a favourable client experience and will help us grow our enterprise.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Sorry.

My question is specific to the sales tactics. I don't have a lot of time so I need to know the specifics. Have you done mystery shopping with the specific objective to find out if tellers or other bank employees are suggesting products that are not in best interests of the customer?

[Scott Wambolt]

Absolutely. That's the point of the mystery shopper.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Okay.

You mentioned something about the chain of an employee being able to make complaints, and their manager is one step. But we heard testimony that managers specifically were rewarded for their branch making sales targets with things like trips, vacations.

Does that still happen in branches? Are managers rewarded with trips?

[Scott Wambolt]

We have an extensive reward and recognition program that's fundamentally based on our balanced scorecard.

The dominant metric on the balanced scorecard, and the first and foremost metric on the balanced scorecard, is the client experience, doing what's right for the client. It's backed up by activities that we know most likely lead to a favourable client experience outcome as well as activities that can also help grow our enterprise.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

So the answer is yes. You still reward. Sales would be in there.

You talk about client experience, but we heard a lot of testimony that clients don't even realize what is being presented to them is actually a sales target or a sales tactic versus a truly good product that they need. Within that, if sales are a factor and a reward for a manager is to go on a trip, do you really think employees are going to go to that manager and say, I'm having trouble with my sales targets, therefore you might not win this awesome vacation?

[Scott Wambolt]

On the subject of trips, we have a number of different prizes and recognition events that our employees are eligible for right across the bank. Whether they be front-line staff or back office staff, they can be eligible for this program.

The program is based on adhering to our code of conduct, number one. It's forwarding our objective on the client experience as well as those activities that I spoke about, to forward a good client experience and as well grow the business.

In terms of an employee feeling that they may jeopardize their manager's attendance or participation in this program, our code of conduct is very clear. Our ethical and professional standards that we ask our team to live up to are very clear on this. If you feel you are being asked to do something inappropriate, tell somebody.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

Mr. Pilkington, you mentioned specifically in your testimony that TD employees don't offer specific products. I want to ask you specifically about the testimony we heard the other day. Members of the TD wealth management team, employees of TD wealth management, and apparently this is a public policy—I've asked for it to be sent to this committee so we'll know if it's public or not—two years ago were told they had to produce a minimum of $2,000 a day in fees and commissions or their pay would be cut.

Is that true?

[Andrew Pilkington]

I don't have the exact details of that. What I do know is that wealth is a very much a growing business at TD.

We're hiring lots of people. Clearly we want to make sure the compensation is right. The people who we hire who come in and are capable of having those long-term client relationships, which are advantageous for the client because it generates wealth for the client—

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Sorry.

[Andrew Pilkington]

—will do better.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Sorry, but my question was on fees and commissions.

Fees and commissions don't drive wealth for clients.

Is it true that—at least two years ago—salaries were based on a target of fees and commissions, not on how well the portfolio is doing for your client but $2,000 a day for fees and commissions?

[Andrew Pilkington]

That's not my area of expertise, or where I work. But I will absolutely go away and get you the answer to that.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

I'd appreciate that because it would—

[The Chair, Liberal, Wayne Easter]

We'll leave you there, Jennifer.

We're over time on your time. We may get a crack later.

Mr. Pilkington, if you could forward us that information, the committee would appreciate it.

Mr. Liepert.

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

Thank you. I really don't have a lot of questions, only a couple of comments for clarification. I believe my colleague might have another question or two.

First of all, when we started this study I suspected we would see exactly what has happened. We have testimony by employees or former employees saying one thing and we have testimony from the employer saying pretty much exactly the opposite. I suspect that when we have our other three witnesses, it won't change very much.

One of the things that concerns me is that this committee does not have the investigative powers, and we had the FCAC before us earlier. I'm glad to hear that is an extensive undertaking, because I suspect it's not in anybody's interest to have these rumours continuing to swirl around. I'm happy to see that.

The other thing that I think is difficult to interpret is at what level does upselling take place within the banks. I think that's where some of the confusion might come in. I'll give you a good example. We made a study earlier on so-called tax havens. Consistently throughout that discussion, the phrase “tax evasion” was interchanged with “tax avoidance”. They are two entirely different things. Tax evasion is illegal and tax avoidance is not illegal.

It seems to me that in the banking business, upselling product—and you can call it what you want and the employees can call it what they want—in essence is part of the bank's business. It is to assist in making the customer more wealthy or doing what is good for the customer. I think part of the problem is where some of this is taking place.

I just want to get clarity from each one of you. I think I heard it right. Upselling does not take place at the teller level. Can you confirm that?

[Scott Wambolt]

Our CSRs do not have sales targets. If a CSR is prompted with something based on what the client has disclosed, or the client's purchasing behaviour, or through analytics, they are encouraged to understand what's going on in that client's life and match a need that becomes clear through discussion with the client, and match it with a product and service.

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

Give me an example of what that would be.