It’s no wonder that first up is Wells Fargo, which has been dogged for almost two years with repeated scandals, all revealing a toxic culture that emphasized finding ways to generate fees over service to clients.
The Wall Street Journal last month reported that Wells Fargo financial advisors pushed clients into products that “generated additional fees and often moved client assets between different products or investing platforms to generate more revenue and bigger bonuses.” The report cited more than two dozen former employees and documents reviewed by the Wall Street Journal as its sources.
Wells Fargo advisors frequently targeted “wealthy clients in Wells Fargo’s private bank, sometimes steering them into alternative investments of which Wells Fargo was the majority owner,” according to the Journal.
These disclosures led to investigations by the Justice Department and the Securities and Exchange Commission, according to the Journal.
A similar culture of commission-driven abuse of its customers was exposed by the Journal. American Express, or AMEX, for more than a decade raised currency prices on business clients without warning. The Journal described an AMEX environment focused on bringing in as many new clients as possible and squeezing revenue out of them before they departed.
“For more than a decade, American Express Co.’s foreign-exchange unit recruited business clients with offers of low currency-conversion rates before quietly raising their prices, according to people familiar with the matter,” the Journal reported. “AMEX’s foreign-exchange international payments department routinely increased conversion rates without notifying customers in a bid to boost revenue and employee commissions, the people said. The practice, widespread within the forex department, was occurring until early this year and dates back to at least 2004, the people said.”
Source: Seeking Alpha