The survey of close to 3,000 dealers by the Ontario Securities Commission and the Canadian Investment Regulatory Organization found that 25% say customers have at least sometimes been recommended products or services that are not in their interest.
The results show sales pressures and compensation structures may be creating a problem, said OSC chief executive Grant Vingoe.
“While it’s clear many bank representatives are prioritizing quality advice, it is also clear that sales pressures and incentivization may be driving concerning behaviours,” he said in a statement.
The survey also showed about one in three representatives say customers had been provided incorrect information at least sometimes, while 32% agreed that the way compensation is structured, it places more value on sales volumes than the quality of advice given to clients.
Respondents were able to provide extra commentary as well, with some emphasizing the tension between compensation-linked sales targets and putting the needs of clients first.
Tension between sales targets and client needs
On average, dealers said variable compensation made up 10% of their total compensation, while on the higher end it could run to 20%.
But dealers also reported general pressure to hit targets, with 68% experiencing sales pressure at least sometimes, and 35% experiencing it often or always, and 44% agreeing that there is a fear of job loss if targets aren’t met.
The survey found 23% of dealers agreed there is high pressure to sell potentially unneeded products or services, while 60% disagreed with the statement.
