4 Corners

[Tyler Durden]

I didn't watch it through to the end, but - even making allowance for the emotive reporting by the ABC - it was a powerful indictment against the CBA, and no doubt something similar applies to the other big banks.

Once again the case is made for people to educate themselves in a financial sense instead of blindly accepting what some 'qualified person' suggests is best for them.

The tenor of the program also supported the claims of the Storm Financial investors who felt so badly used by the CBA.

Yes! What you have said in bold was one thing in my mind which I just couldn't put into words, thank you!

One other thing it made me think about though was how much greed on the part of clients had to do with it. I'm not talking about them wanting their money in conservative investments and Donny putting it into high risk investments.

I'm thinking of the lady who had $1m to invest, and gave it to the bank with the instructions that they did not want to lose any of the capital. If that's the case, why not just put it into an interest bearing account yourself? Why give your money to someone else to try to earn an above interest rate, yet not want to accept the risk of losing capital? Seems like they wanted to have their cake and eat it too.

 

[banco]

I'm thinking of the lady who had $1m to invest, and gave it to the bank with the instructions that they did not want to lose any of the capital. If that's the case, why not just put it into an interest bearing account yourself? Why give your money to someone else to try to earn an above interest rate, yet not want to accept the risk of losing capital? Seems like they wanted to have their cake and eat it too.

Probably because the lady had no clue and decided to see an "expert". It's no different to if you go to a mechanic and he tells you you need 10 things done that you don't need done.

 

[DocK]

There are many types of capital secure investments apart from term deposits. Maybe she wanted advice on splitting it between short-term and long-term interest-bearing investments. The point is that her clearly expressed risk tolerance was completely ignored by the CBA employee.

What I find most telling about the program however is the clear message that the CBA executive were more than willing to turn a blind eye to their own written systems and procedures in favour of reaching ever higher sales targets - with absolutely no focus on placing their client's benefit before their own. The overriding theme is that we are all simply fodder for the banking profit machines, and we should trust a bank at our peril. Sadly, the penance for gullibility and financial illiteracy is often ruination at the hands of those we've been exhorted to trust the most. A compliance staff of 1.5 over something like 700 planners shows just how much weight the CBA placed on procedure over profit.