Canada’s largest banks are under renewed fire after a seniors’ advocacy group accused them of failing to rein in sales practices that regulators have already flagged as harmful. At the center of the dispute is a blunt charge: that profit targets inside bank branches are still shaping advice given to millions of older Canadians.
The criticism follows months of private correspondence and now, a very public escalation.
A public rebuke after private talks went nowhere
The sharp words came from Canadian Association of Retired Persons, better known as CARP. Its chief executive, Anthony Quinn, published an open letter criticizing the banking industry for what he described as a lack of meaningful reform.
Quinn’s frustration wasn’t sudden. It followed an exchange of letters last year with Canadian Bankers Association and its CEO Anthony Ostler, after regulators released a troubling review of sales behavior inside bank branches.
In a blog post published on CARP’s website, Quinn said he decided to make the correspondence public because it had become clear, in his view, that Canada’s biggest banks were “not interested in putting clients and seniors’ best interests and financial security ahead of their profits.”
That sentence landed hard. And it was meant to.
What regulators found inside bank branches
The backdrop to the dispute is a joint regulatory review released last July by the Ontario Securities Commission and the Canadian Investment Regulatory Organization.
The review examined sales practices at five bank-owned mutual fund dealers in Ontario. Those firms were:
-
BMO Investments Inc.
-
CIBC Securities Inc.
-
Royal Mutual Funds Inc.
-
Scotia Securities Inc.
-
TD Investment Services Inc.
Regulators surveyed 2,862 mutual fund advisers working inside bank branches. What they heard raised alarms.
Advisers reported facing intense pressure to meet sales targets. That pressure, regulators said, could push advisers to recommend products or services that were not aligned with a client’s best interests.
For seniors and near-retirees, that risk carries extra weight. These are often people living on fixed incomes, managing retirement savings they cannot easily replace.
One number from the report stood out. About 24 per cent of advisers said sales expectations had, at times, influenced the recommendations they made to clients.
That’s not a rounding error. That’s systemic.
Why seniors are especially exposed
CARP estimates that roughly six million Canadians invest through bank branches. A significant portion of them are older adults who trust familiar institutions and long-standing relationships with branch staff.
That trust, Quinn argues, is being exploited.
Many seniors assume that advice from a bank employee is neutral, even fiduciary in nature. In reality, mutual fund advisers at branches often work under compensation and performance structures tied to product sales.
The regulator’s report didn’t accuse banks of illegal conduct. But it did describe an environment where incentives and client interests can collide.
For seniors, the consequences of that collision can be serious. Higher fees. Inappropriate risk levels. Products that don’t match income needs.
And once retirement savings are gone, there’s usually no second act.
Banks respond, but critics say it’s not enough
In earlier correspondence with CARP, the Canadian Bankers Association defended its members, pointing to existing reforms and internal compliance programs. The industry has repeatedly said it supports putting clients first.
But Quinn says those assurances ring hollow.
According to CARP, the CBA’s response failed to commit to concrete changes, such as eliminating sales targets tied to investment advice or clearly separating sales roles from advisory ones.
Instead, Quinn says, the industry’s stance amounts to delay and deflection.
From the banks’ perspective, branch-based advice plays a role in expanding access to investing for everyday Canadians. Removing incentives altogether, they argue, could disrupt service models and limit availability.
Still, critics counter that access means little if advice is compromised.
A broader debate about trust and accountability
This dispute taps into a long-running debate in Canadian finance. Can large, sales-driven institutions truly offer unbiased advice to retail investors?
Regulators have tried to walk a middle line. They stop short of banning sales targets outright but encourage firms to manage conflicts more aggressively.
Consumer advocates say that approach hasn’t gone far enough.
CARP’s public challenge adds pressure at a sensitive time. Public trust in financial institutions is already fragile, especially among older Canadians who lived through market crashes and rate shocks.
And the issue isn’t abstract. It shows up in branch meetings, in portfolio reviews, in quiet conversations across desks.
Basically, it’s where real people make decisions that shape the rest of their lives.
What the data says about pressure and behavior
The regulatory review offered rare insight into internal dynamics at bank dealers.
Advisers described regular tracking of sales metrics. Some said underperformance could affect compensation, job security, or career progression.
Even when no one explicitly ordered unsuitable sales, the message was clear. Targets mattered.
Regulators warned that such environments increase the risk of “misaligned outcomes,” especially for vulnerable clients.
They also noted that seniors may be less likely to question recommendations or shop around for alternatives.
That combination worries advocates. And honestly, it should.
Where this leaves the industry and policymakers
For now, no new enforcement action has been announced. The OSC and CIRO framed their review as a diagnostic step, not a punishment.
But CARP’s intervention could change the tone.
By going public, Quinn has raised the political and reputational stakes. Lawmakers may now face calls to revisit how investment advice is regulated inside banks.
The industry, meanwhile, must decide whether incremental adjustments will satisfy critics or whether deeper structural changes are inevitable.
This isn’t just about compliance checklists. It’s about credibility.
As Canada’s population ages, the number of seniors relying on bank advice will only grow. So will scrutiny.
