Sales Culture Concerns at Canada’s Bank Affiliated Dealers: New OSC/CIRO Report Highlights Persistent Problems

A new joint report from the Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization (CIRO) raises fresh concerns about the sales culture inside five of Canada’s major bank affiliated mutual fund dealers. The findings suggest that high sales pressure, conflicted incentives, and knowledge gaps among representatives may be undermining the quality of advice delivered to retail investors.

The full report, Sales Culture Concerns at Five of Canada’s Bank Affiliated Dealers, is available directly from the OSC Here

High Sales Pressure Remains Widespread

One of the most striking findings is the prevalence of sales pressure. Nearly seven in ten representatives report experiencing pressure to meet sales or asset targets at least occasionally, and more than a third say this pressure is frequent. Many respondents indicated that failing to meet targets could affect their compensation or even their job security.

This environment, the report notes, increases the risk that representatives may recommend products that are not fully aligned with a client’s best interests.

Conflicted Incentives and Limited Product Shelves

The report also highlights the influence of compensation structures. Roughly a third of representatives believe their pay places more emphasis on sales volume than on the quality of advice. Scorecards and performance metrics often reward the sale of proprietary mutual funds, while safer or lower cost alternatives—such as GICs or third party funds—receive less emphasis.

This is compounded by the fact that 94% of surveyed representatives can sell only their bank’s own mutual funds. Almost half believe their clients would benefit from access to a broader product shelf.

Knowledge Gaps and Client Impact

The survey reveals notable gaps in product knowledge. Nearly a quarter of representatives could not correctly define a management expense ratio (MER), and one in three said clients sometimes receive incorrect information. These findings raise questions about the adequacy of training and oversight within the dealer networks.

Fear of Speaking Up

Another troubling theme is the reluctance of representatives to raise internal concerns. More than a third fear negative consequences if they speak up, and among those who do, many say their firms rarely address the issues raised.

How This Compares to Past Regulatory Findings

This report echoes a pattern regulators have been documenting for nearly a decade:

2016–2018 CRM2 Reviews

Regulators found that compensation structures and sales targets often conflicted with the duty to provide suitable advice.

2018–2019 Mutual Fund Fee Reforms

The OSC identified concerns about embedded commissions and the promotion of proprietary funds over lower cost alternatives.

2021–2022 Client Focused Reforms (CFRs)

CIRO and the OSC emphasized the need for firms to address conflicts of interest and ensure recommendations truly serve the client’s best interest.

2023 Mystery Shopping Report

Regulators found inconsistent advice quality, with many representatives recommending higher fee products without clear justification.

The new findings suggest that despite these earlier efforts, many of the underlying cultural and structural issues remain unresolved. Sales targets, compensation incentives, and limited product shelves continue to shape the advice clients receive—sometimes at the expense of objectivity.

What Comes Next

The OSC and CIRO have indicated that they will now gather detailed information directly from the five bank affiliated dealers. This includes reviewing compensation models, scorecards, training programs, and supervisory practices. Depending on what they find, further regulatory action may follow.

A Continuing Conversation

For Canadian investors—particularly seniors, new investors, and those relying heavily on bank based advice—the report serves as a reminder to ask questions, seek clarity, and understand how their advisor is compensated. For the industry, it underscores the ongoing challenge of aligning sales culture with the obligation to act in the client’s best interest.