Lesson #13 OH! NO! What now?

Students of life listen up:

If they are not making money, they will close. This is a basic concept that everyone should know by now. A business is only a business if it’s making profits. Even charities need to make money, or they will simply cease to exist. You do not need an engineering degree to grasp this concept.

Why are people getting so upset about banking institution closures? I heard one lady rant to a teller the other day, that she’s been banking at this branch for 50 years (even though it was only built in 1996) and that she couldn’t believe that they were going to make her drive an extra 5 minutes to deposit her cheques. Yes! You heard right! Deposit a cheque! Obviously, this person doesn’t use the deposit feature thru her Smartphone of tablet banking app.

istock-654378978-online-bankingThe point I’m trying to make here is that online banking and applications have made it so that most people never have to even step into the branch anymore. The only reason I was there myself, was because I needed to do a currency exchange for some US Dollars. If I wouldn’t have procrastinated as long, I could have even ordered it online and the magical Fed Ex fairy would have delivered it right to my home address. I honestly can only name 3 reasons that I would ever need to physically enter a branch again and those events might only happen every couple of years.

Now if you take a few minutes to read my very first blog post Lesson #1 Banking Idiocracy, you will know that I’m not a fan of banks today, but I used to be. Once I realized that I was stuck in this machine geared to their profits and not to my interests, I got out! Banks haven’t been in the advising game for many years now because good financial advice takes time to share and doesn’t come cheap. Time + Education = Less profits. In my book, banks are one of the most dishonest businesses out there, because they make you believe that they have your best interests at heart. Give me your money for free and I will charge you to use it…Total NON-SENSE! They are truly amazing at accumulating wealth, but they are not too good at growing it for others (only for themselves).


So what needs to happen before a bank closes a branch?

If the bank truly cared about its customers, they’d be consulted. I just heard about another branch closing in Marathon, by the end of summer. This is a community of about 3500 people and most of them are either retirees or very close to pulling the plug themselves. Using my earlier example, the lady who hasn’t grasped the digital age of banking, she will be like a fish out of water when the closure happens. Banks should take the time to offer their clients training using the online banking site and even the apps. They know who those clients are! Bottom line is that day-to-day banking is no longer conducted in person, therefore why are the banks wasting money on physical locations? Change is scary for a lot of people, especially for certain age groups. Therefore, banks have a fiduciary responsibility to transition their clients to alleviate the stress and the anxiety of those cuts and closures. It’s time to give back a little. A simple announcement, even with 6 months notice, will not suffice!


What are alternatives available to replace traditional banking?

Credit Unions and CO-Op’s offer a better customer service experience to most of the BIG 5 banks, but they are basically traditional banking with discounted fees. In the past few years, there has been tons of advertising for these No-fee & Non-Branch banking alternatives like Tangerine who is owned by Scotiabank. Imagine! One of the Big 5 banks getting into this new business model… I wonder why? (major sarcasm here!) The problem with these alternatives is that you still can’t get the face-to-face support if you need it. Currently, the only non-branch banking solution that offers Face-to-Face support is Manulife Bank. As a financial advisor that is contracted with Manulife Bank this is a very biased recommendation, but at least I can provide my clients the support they need to use the applications and the online banking services. I don’t always have time to do it myself, but someone in the office is available should they require training or assistance. We actually sit down and show you how to use the tools. Manulife Bank is pushing for the advisors to be all things to their customers, including banking experts. Because of the time restraints, most advisors stay away from the banking side of the business because it’s not lucrative enough for them. Fortunately, Financial Literacy is our PRIMARY focus. We do need to make money to survive, but I’d rather make $5/month per client forever than $500 once. (I’ll include a direct bank link below for those who wish to learn more about it.)

Let’s recap today’s lesson:

  1. Don’t be fooled! Banks no longer care about their customers, only profits!
  2. Alternatives exist. You simply need to start doing a little research. Ask Dr. Google!
  3. Change does not have to be scary!

Technology in the hands

I’m a smart guy, but even I’m not immune to advertising campaigns and promotions that make you feel good inside when you sign up. Nobody spends money unless they are getting something in return, especially businesses and corporations, who record billions of dollars in profit per year or in the case of the banks, per quarter! If they are closing a branch, it’s because they have probably capped out! Meaning, they can’t make any more money from their customers. When the bean counters are finished, it’s more profitable for them to cuts costs, even if they lose clients in the process. Change is good…don’t take it personally.

I’ll learn ya!




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