What if advisors cheat clients

Banks: Bank advisors unpack: "I cheated on you"

The impression couldn't be better. A lady in a dark suit approaches the bank customer with a swing. Karina B. * is around 30 and is a private customer advisor at a branch of SEB Bank in the Ruhr area. She smiles obligingly, receives the customer in the entrance hall with a firm handshake and leads him to her perfectly tidy desk. Over a cup of coffee, Karina B. asks about her personal well-being - “and what are the children doing?” She knows the customer well, she knows what is on the safe side. That's why she invited him today. After a few minutes, she directs the conversation to a “very special investment opportunity”, a certificate for 10,000 euros. That, she says, is just as secure as a fixed-term deposit that guarantees a return, just right for him. The customer is quickly convinced: "If you say that, it will be true."

A mistake. The product that Karina B. has just sold him is in fact highly speculative. The money is just as unsafe as the promised return. The chic lady lied ice cold to her customers. In the morning, her boss had given the motto that every advisor in the branch had to sell a 10,000 euro certificate. And Karina B. knows: If she wants to keep her job, she has to meet the requirements. No matter how. SEB did not want to comment on this sales practice.

This is how Karina B. describes her everyday work. In the past few months, WirtschaftsWoche has interviewed dozens of branch employees from various banks in Germany - from Commerzbank and HypoVereinsbank to the Swedish SEB, from the small Weberbank in Berlin to Deutsche Bank and the large savings banks. Karina B. is one of them who unpacked in long conversations: about the fear of colleagues and superiors and about how they talk customers into products that they don't even need. The WirtschaftsWoche has internal mails and papers that prove that in the supposedly serious industry, it is not uncommon for conditions like a column of pushers to prevail.

The case of the derivatives trader Jérôme Kerviel, whose fraudulent speculations cost his bank, the French Société Générale, 4.9 billion euros, made headlines around the world in the past few days. Such a gigantic volume of fraud is an exception. However, research by WirtschaftsWoche has shown that trickery is part of everyday banking business. Safe: Not every bank employee uses unfair methods to achieve the goals they are required to achieve. But the growing shortage of sales in the branches is what drives many employees to do just that. To the detriment of the banks - but above all the customers.

It is a sophisticated system of individual sales targets - underpinned with threats and humiliations - that turns the dream job of a banker into a nightmare for many private client advisors. And for customers visiting a branch at an incalculable risk. Because the consultant from the past has become a salesman who often has an easy time of it: "If someone buys a car, he compares the prices beforehand, if someone buys a banking product, he doesn't," says a consultant at Weberbank in Berlin. “This is why the banks' sales pressure works so well,” says Friedrich Schade, who was employed as a banker at various institutes for 15 years and now works for a financial service provider. “People often blindly trust bankers.” They refrain from reading through contracts, comparing returns or taking advice from different banks.

The individual sales targets differ from bank to bank: Some institutes require their employees to meet a specific profit target, while others dictate to the individual advisors exactly how many life insurance policies, loans or funds they have to sell per week and how many new customers they are to be sold to To have worries. And they have to meet these requirements. Somehow. They are under constant observation by their superiors and have to justify themselves if a customer leaves the branch without signing a contract. In the lounges of some branches there are employee rankings that expose bad salespeople. Often there is also threat of dismissal.

"When it comes down to it, we sell an Eskimo a refrigerator," says Claudia S. *, a long-time employee of Dresdner Bank. "If your supervisor signals that he'll somehow get you out of your job if you don't achieve your goals," says a works council of a major Frankfurt bank, "then it will come to that." Dresdner Bank does not want to comment on what its employee said.

Karina B. and many of her colleagues at other banks recommend customers swap new shares for old ones, even if it doesn't work at all; they turn on certificates to customers, even if fixed-term deposits or time deposits would make more sense; they are pushing for unnecessary insurance. And all of this only because they currently still have to sell the products or the bank can expect high commissions.

"The number of wrong advice has increased in the past few years," says Eva Raabe, banking expert at the consumer advice center Hessen. Many bankers she speaks to would say quite openly: “We have to achieve our goals.” This is exactly where the problem lies for critics: “Employees would start selling products to customers that they don't need,” says a spokesman ING Diba, which does without individual sales targets. “We don't want that kind of culture here.” After all, the institute has become the direct banking market leader in Germany.

Even at the GLS Bank in Bochum, which specializes in ethical-ecological investments, the controversial requirements do not exist. “Employees can put the individual goals under such pressure that the customer gets turned on the wrong products for them,” says GLS boss Thomas Jorberg. "With predefined aggressive sales methods, a sales manager creates the conditions for dissatisfied customers and damage caused by incorrect advice."

As in the case of Karina B. She has already sold the 10,000 euro certificate today. Now a new customer is sitting in front of her. The man chats openly about his financial situation, where he has invested and where he has not. Above all, however, Karina B. learns how well informed he is - how far she can go with him.

She recommends that he put his savings into a fund. And since, as he says, he has a few hundred euros left over every month, he should conclude a fund savings plan right away. He also has to take care of his retirement provisions: “At 65 you don't want to have to turn over every penny three times?” Of course not. Nor does he want to miss out on the top returns from the funds that Karina B. has prophesied for him.

Nevertheless. He doesn't want to sign today. He would like to go through the documents one more time at home. For Karina B. this is a disaster.

She has to somehow convince the customer, even if she understands all too well that he doesn't want to rush anything. Because if he doesn't sign now, she'll have to explain to her boss right away why she hasn't generated any income for the bank during this hour. Experience has shown that the customer comes back, the business is only delayed by a few days. But she mustn't advise him to read the documents again at home in peace. Your boss has previously made it clear that he will not tolerate such “business-damaging behavior”: “If you do that again, there will be a warning”, he threatened at the time. SEB does not want to comment on this aspect of sales practice.

Karina B. has, she reports, to generate a gross profit, minus all costs, of around 1,500 euros a week. Confronted with individual sales goals, SEB insists on its sales philosophy: “Of course we also measure product sales. For SEB Bank, sales and results orientation also means measuring employees by their sales success, ”according to a written statement.

Karina B.'s specifications are divided into individual goals for the various product categories. According to internal documents, she had to sell an average of 1.3 consumer loans over 12,000 euros per week, plus 0.4 residual debt insurance, and 1.4 new customers. There are specifications for every product.

In addition to her own sales specifications, Karina B. also has to meet those of the branch, i.e. compensate for the weaknesses of other colleagues. The SEB says that it is part of a profit-oriented organization to “define, track and review sales targets for locations. The focus is on team performance and the team result ”.

What Karina B. recommends to her customers is also based on the categories in which she or the branch have to catch up. On May 3rd last year, a supervisor wrote an email to the employees that was available to WirtschaftsWoche: "In the precautionary area, production for this week is at 0," it says. “The previous week did not lead to 100% results either. The activities are to be increased immediately in the form of cross-selling from the existing appointments and the generation of appointments. ”On May 7th, another alarm e-mail stated that the weekly planning would require“ an increase in production in the instant loan business ”. And in the provision business "100% of the weekly production is to be provided, i.e. daily production". Two days later, the admonition to continue to concentrate on immediate loans and provision, “It is not enough here. We still need a few more tickets for the week here ”.

Ten years ago, the banking world looked different. "At that time, earnings targets were also formulated, but for the whole year," says ex-banker Schade. “We had enough time to address people and advise them in line with their interests. Nevertheless, we have increased our results every year. ”There were no goals for individual products. It wasn't a problem if the securities professional sold more securities and the insurance professional sold more insurance.

The banks made the big profits in investment banking anyway. When this source of income did not generate as much after the 2001 stock market crash and the commissions no longer flowed by themselves, private customers should buy more products and mitigate the slump in profits.

All banks worldwide were faced with the problem, but in Germany the private customer market is particularly competitive due to the strong position of the savings banks and cooperative banks. Commercial banks in particular, which had neglected their private customers for years, tried in recent years to lure private customers with low lending rates and high credit interest rates.

This has led to a drop in prices, and net interest income - profit from traditional banking, borrowing and lending money - has fallen continuously over the past few years (see chart). Therefore, the institutes are more dependent on commissions from the brokerage of funds or insurance companies. Boosting this business is the main task of the consultants in the branches, where "especially in the big banks there is often merciless pressure," says Schade. "In the past few years, the return expectations in the private customer business have risen very significantly," says Uwe Foullong, Federal Board Member of the Verdi union and responsible for financial services, "the selling pressure on employees has become noticeably stronger."

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