Bank Tour

With the numerous complaints of the tactics used by banks to do “financial planning”, I thought it would be good knowledge when advising customers, to experience these bank advanced selling techniques first hand myself. So, I decided to pay a “mystery shopping” visit with a close layman friend who was indeed keen to take up a savings or investment plan, depending on what they had to offer. I sat quietly beside without interjecting my opinion, or affecting the sales process.

Bank A

The staff seemed pretty new as he was unfamiliar with the forms and was disorganized in the sales process. He did go through the risk profiling and after determining that my friend was “Balanced”, he recommended a Unit Trust. He was quick to highlight that there is a promotion of free gifts for investment amount of $50k and higher for a riskier fund that was recently launched.

He emphasized a lot on the dividend payouts and past performance. He also provided a lot of opinions about the bullish outlook of the fund, recommending a holding time frame of 3 years for good returns.

When queried about the sales charge, he stated that it is an industry norm of 5% up front. He was evasive when asked further if other funds were cheaper or the difference of purchasing online.

Overall, my friend did not have confidence in him and felt oversold on the assurance of performance.

Bank B

It was an amazingly brief session here. The staff immediately asked my friend if she was risk adverse or keen on investing. My friend replied that she was quite risk adverse but keen to invest. So the staff explained that if she was risk adverse, he will recommend a savings plan with guaranteed returns but if she was keen in investing, he will recommend unit trusts.

My friend decided on investing and was next asked the investment amount. Upon hearing a low five figure, the staff became distracted in his presentation and was constantly looking out for new customers.

My friends was extremely displeased and decided to leave after a while.

Bank C

The staff was friendly and complimented my friend that she looked so young. Then after breaking ice, it slowly led to the punch line that disciplined saving is important when she is young.

Without my friend providing any information at all yet, the staff proceeded to draw a savings plan of $500 per month for 5 years. That is $6k a year, $30k after 5 years. In normal savings deposits, it is 0.125% interest that is $37 only. However, if you save through our promotional plan, you will enjoy 5.25% interest, giving you a total return of about $1,500, compared to just $37.

When asked if the returns were guaranteed, the staff proceeded to generate the Benefit Illustration, and assured my friend not to worry as the figures are all stated in black and white by the bank.

Then my friend asked if this was an insurance plan. The staff complimented that she was very sharp and explained that this savings plan has an additional benefit that gives your loved ones the targeted savings amount immediately if anything were to happen to her during the 5 years while she was saving, unlike bank deposits where you will only get what you have already saved.

Next, my friend asked if there were any risk. The staff tactfully side stepped the question by saying that this is not risky like stocks or unit trust where the price fluctuates daily. The staff then proceeded to do the fact find forms by assuring my friend that he will place her risk profile as risk adverse and the bank does not allow unsuitably risky products that do not match customer’s risk profile to be sold.

I was dumb folded when my friend started to sign papers and took up the plan. I remained silent and carried on to observe till everything was completed, with majority of the forms filled in by the staff without asking much.

After leaving, I sat my friend down and gave her the whole honest truth of the plan details. She was shocked that the 5.25% was non-guaranteed and even if the plan did achieve it, the figures only add up to a 2% pa return. Further, I did some cash flow management calculation with her, taking into consideration her wedding goals in 2-3 years time. She could ill afford the plan for the next 5 years and if she was to surrender the plan in 3 years time, she would lose most of her savings. Fortunately, I shared with her that she has a 14 day free look period (which she was not told as well).


In conclusion, I do understand that this is a double edged sword. Practitioners can actually pick up techniques from here to innovate and upgrade their sales skills. But I hope rather that more consumers will be aware, learning from other people’s experiences and not making the same mistakes.