Canada’s top securities watchdogs are raising red flags over what they describe as troubling dynamics within the country’s biggest banks. A sweeping joint review by the Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization (CIRO) has revealed that sales incentives, not client interests, may be steering investment recommendations at bank-affiliated mutual fund dealers.
Drawing on survey responses from nearly 3,000 front-line staff at five major institutions, the report uncovers a sales culture where pressure to perform, often via scorecards tied to sales targets, may be distorting financial advice and eroding public trust.
Though many representatives said they were satisfied with their product offerings and confident of their knowledge, a quarter admitted to recommending products “sometimes” not in the client’s best interest. One in three acknowledged clients had been misinformed.
While regulators praised the banks’ willingness to participate in the study, they signaled deeper concerns around compensation structures, training deficiencies, and the alignment of advice with client needs, issues they say will be the focus of continued oversight and potential reform.
Years of warnings
Years before regulators launched their latest probe into sales practices at the country’s five largest bank-affiliated mutual fund dealers, whistleblowers had already been sounding the alarm. A 2024 undercover investigation by CBC’s Marketplace painted a troubling picture: tellers and advisers misleading customers, publishing debt products and mutual funds regardless of suitability, and often giving advice that experts say runs afoul of the Bank Act.
At the heart of it all is an aggressive, metrics-driven sales culture where job security often hinges on hitting targets, not doing what’s right for the client.
It was this explosive reporting, based on secret recordings, employee testimonies, and hidden camera footage, that spurred the OSC and the CIRO to act.
In late 2024, the two regulators announced a coordinated review into bank-brunch sales practices, aimed at assessing whether Canada’s biggest banks were putting profit before the public. The move marked the first major regulatory intervention since a 2018 federal report found that sales targets in retail banking posed a risk to costumer interests. The 2025 review had confirmed what critics have long alleged: a pattern of advice distorted by incentive structures, and clients being steered toward products they may not need, or fully understand.
Sales environment
At the heart of Canada’s mutual fund dealer branches lies a paradox: the push to offer client-first financial advice coexists uneasily with compensation structures that reward sales volume.
According to the OSC and CIRO’s joint review, many representatives receive variable pay tied to performance, sometimes up to 20%, with sales targets outweighing client satisfaction or financial planning quality as drivers of reward.
“I feel pressured at work to make sales that aren’t always suitable for my client. This needs to change, as the practices in place are creating unease and anxiety for myself and clients.”
Roughly one-third of the surveyed employees acknowledged that their compensation could lead to recommendations misaligned with client interests, and more than a third believed it increases the risk of unsittable advice.
“I feel pressured at work to make sales that aren’t always suitable for my client. This needs to change, as the practices in place are creating unease and anxiety for myself and clients,” commented one representative in an open-text response.
Scorecards tracking sales and client interactions, updated regularly and benchmarked against peers, further amplify the pressure to sell. While some respondents defended the compliance systems in place, other pointed to a culture where selling a large mutual fund garners more praise than delivering a careful, modest financial plan.
Sales pressure
Sales pressure is not an exception but the norm within Canada’s bank-affiliated mutual fund dealers, according to the OSC and CIRO’s latest review. Over two-thirds of representatives reported feeling pressure to sell at least “sometimes,” with over a third experiencing it “often” or “always.”
For many, this pressure comes with emotional and ethical strain.
One representative described being coached to exceed 150% of sales and referral targets, while noting a clear conflict of interest when mutual fund sales are compensated to a higher rate than other products.
“There is a paradox in providing financial advice and tying compensation to how much you can sell. This comes from the top.”
The problem isn’t just the pressure itself, it’s the environment that discourages employees from speaking up. While 79% of representatives said they had at least occasional concerns about sales pressure, nearly 40% were reluctant to raise them for fear of reprisal.
Among those who did, 43% felt their concerns were “rarely” or “never” addressed. These findings point to a workplace culture where bottom-line targets can overshadow client interests and internal feedback mechanisms fall short.
And 25% of all surveyed representatives admitted that clients had been recommended unsuitable products at least “sometimes.”
“There needs to be an overhaul in this industry that puts the clients’ needs first above the bank’s targets and goals. There is a paradox in providing financial advice and tying compensation to how much you can sell. This comes from the top,” said a representative in an open-text response.
As regulators weight next steps, these results may compel Canada’s largest financial institutions to reassess not just their sales strategies, but the values that underpin them.
Product self-limitations
Most mutual fund dealing representatives at Canada’s bank-affiliated dealers work within a narrow product shelf: 94% report they can only offer proprietary (in-house) mutual funds, with no access to third-party options.
While a strong majority (78%) believe the current range adequately meets clients needs, nearly half (48%) also think clients would benefit from a broader selection that includes external funds.
“Being able to offer a broader range of mutual funds would require me to have in-depth knowledge of those third-party funds, and that would require me to spend more time researching and understanding those funds, and that would detract from the time I have available to meet with clients,” commented one representative.
This suggests that while representatives generally view their current offerings as serviceable, many acknowledge that increased choice could improve client outcomes, particularly for those with more complex and specific investment goals.
Qualitative responses reveal a nuanced view. Some representatives see value in the current model, noting that clients can be referred internally for products beyond their scope. Other caution that expanding the shelf may introduce risks, such as product confusion and insufficient training.
“Being able to offer a broader range of mutual funds would require me to have in-depth knowledge of those third-party funds, and that would require me to spend more time researching and understanding those funds, and that would detract from the time I have available to meet with clients.”
Knowledge gaps
Most bank-affiliated mutual fund representatives appear confident in their peers’ knowledge, about 80% believe their colleagues are well-versed in registered accounts, client assessment, and mutual fund dee structures.
However, one-third of respondents acknowledged that clients are “sometimes” given incorrect information, raising concerns about consistency in real-world application. Open-text feedback highlighted gaps in onboarding and training, especially for new representatives unfamiliar with basic product lists or the investment sales process.
To test actual knowledge, the survey concluded with six technical questions, mirroring concepts required for mutual fund licensing.
While most representatives performed well (86% answered five or more questions correctly), results revealed specific weaknesses. Notably, 23% of respondents failed to correctly define the Management Expense Ratio (MER), a core component of mutual fund disclosures.
Although only 12% missed the follow-up question about MER’s impact in fund performance, the disconnect suggests that some representatives can recognize the effects of fees without fully grasping their underlying structure.
These findings point to the need for enhanced training, especially in areas where knowledge gaps risk misleading clients or diminishing the quality of advice.
Key takeaways
The OSC and CIRO’s survey reveals a complex and often contradictory sales culture at Canada’s largest bank-affiliated mutual fund dealers.
Despite strong compliance frameworks and formal training programs, a significant portion of representatives report structural pressures, such as compensation models, performance scorecards, and peer-to-peer comparisons, that can incentivize sales behavior misaligned with clients’ best interests.
What’s often missing from this discussion is the direct connection between sales pressure and inclusive, sustainable workplace practices.
The same sales structures that drive representatives toward aggressive product-pushing may also contribute to environments where diverse talent struggles to thrive. Research across sectors has shown that performance cultures narrowly focused on revenue often create barriers for underrepresented employees, particularly women and racial minorities, who may be penalized for prioritizing client trust, collaborative service, or risk-averse conduct over raw sales figures.
As Canada’s financial regulators expand effort to enforce diversity disclosures in leadership, as OSFI now requires, mutual fund dealers may need to align internal metrics with broader DEI values if they hope to create workforces that are both diverse and ethically resilient.
In short, sales culture reform is not just a question of investor protection, it is a necessary condition for making DEI policies meaningful. Ensuring that representatives are empowered to serve clients transparently, without undue pressure or perverse incentives, could also foster more equitable advancement pathways across banks.
