“Corporate Profit > Customer Profit”: A Case Study of a Poor Example at a Major Securities Firm

This is a story about a time I was consulting on future asset management at the counter of a major securities firm. I will introduce a case where they skillfully ignored the customer's (my) interests to prioritize the company's profits.

This is a representative from a securities firm I have had a long relationship with. I possess a certain level of financial literacy and have about 30 years of investment experience. The representative knows my investment style and knowledge.

Usually, I meet with the representative I trust, but on that day, their supervisor was also present. I made a request to be taught the optimal management method for me.

Then, the supervisor began explaining only products that were convenient for the securities firm.

Since I mainly use online securities firms, I told them that I knew the same products could be bought more cheaply through an online broker.

To put it simply using tomatoes 🍅: The same farmer shipped tomatoes (investment trusts) from the same field. At the greengrocer (online securities firm), they are 100 yen each. At a high-end supermarket (major securities firm), they are 1,000 yen each. They are the same tomatoes.

Even so, the supervisor skillfully explained the added value of that product from various angles.

(🍅: At the greengrocer, they put the tomatoes in a plastic bag, but at the high-end supermarket, they put the tomatoes in a paulownia wood box. They are the same tomatoes.)

The supervisor brandished the securities firm's sense of security, brand power, past performance, and consulting ability to push the product even harder.

(🍅: I-I-I'm telling you, if they're the same tomatoes, I'll buy them at the greengrocer!)

Needless to say, the supervisor failed miserably because they did not personalize the service to me as a customer, but instead deployed a sales pitch that forced me into the wrong mold.

The trusted representative sitting next to me looked pained the whole time. Later, when I asked the representative to reflect on this meeting, they honestly told me that they knew well that the product would not resonate with Mako-san. They said they were on edge, worried that it might even make me angry.

Of course, I didn't get angry. As someone who teaches sales skills, I was actually excited to witness such a poor example firsthand.

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Mako: Why did that supervisor try to push it on me without understanding me?
Representative: It's a quota (pressure) from the supervisor's supervisor.

Mako: Isn't that your own quota too?
Representative: Yes, it is my quota.

Mako: Then why didn't you introduce that product to me?
Representative: Because it wouldn't be to Mako-san's benefit.

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They gave me an answer that showed they knew my investment style. I was relieved that they were a capable representative.

However, this securities firm's profit-first policy, which ignores the customer, was a fact. For me, being able to witness it was a significant experience.

However, I could clearly see the structure where a customer without knowledge would buy a rip-off product (a 1,000 yen tomato 🍅: it's legal) and be satisfied, never realizing they were being ripped off. (After all, the tomato 🍅 is in a paulownia wood box.)