Often these days, you’ll hear crybabies go on TV to complain about something called the “coarsening of public discourse”. I myself have predicted that in an ever more competitive world, businesses would resort to attack ads, just like it’s done in politics.
I think I have found the culprit behind these disturbing trends. It’s Wealthsimple founder Mike Katchen.
In an article on its website called How to invest in mutual funds, Wealthsimple says:
Bigger is not always better, as we learned in the case of JP Morgan when it was fined for pushing clients into their own inferior mutual funds. So before signing up with any company, Google the company with terms like “wrongdoing” and “SEC” and see if anything troubling comes up.
Firstly, this is not even accurate. If you follow the link above to the SEC action that Wealthsimple references, you will see that the thrust of the issue was a failure to disclose conflicts of interest. The SEC made no judgement as to whether the JP Morgan products were inferior (nor are regulators in the business of making such assessments). Secondly, this is undignified behaviour. When’s the last time you heard me disparage an industry player? Last week? Alright, I stand corrected.
That article also says:
As you know, if you've ever received a Snuggie under the Christmas tree, companies are willing to sell you just about anything.
I know exactly what they mean - for example, I know this large robo-advisor that passionately believes in low-fee index investing, but also owns a mutual fund dealer and also offers trading, in case you want to try your hand at being an investment genius. And they have this new division called Digital Assets, who knows what that’s about.
Here they are talking about BMO:
But bank branches aren't cheap. Bank of Montreal, for instance, spent about $500 million on office space and equipment rental last year and has spent over a billion dollars making capital improvements to its branches over the years. You don't ask us to redecorate your apartment, so we won't ask you to pay for any couches. Deal?
Paul Desmarais III has told how Wealthsimple once came up with some copy calling all insurance agents sleazy, but given Power’s interests in insurance, he prevailed in getting them to use a more moderate tone. So you can see that Wealthsimple’s natural instinct is to communicate its beliefs forcefully. I think that’s good, customers win when there’s fierce debate. It’s OK to trash talk industry players - it’s a standard Mike Katchen has set. Don’t blame OPM Wars for this. Now, watch this ad:
So Lydia calls her bank a “possibly evil entity” and then implies that she may not trust her banker. Lydia is a real person (this is a “real people” ad). I have no idea if Lydia took a fee for this advertisement, but I suspect she did. That’s generally how the world works.
Paul the banker is also presumably a real human out there. Why did Lydia throw Paul under the bus like that? So hurtful! How about taking some personal responsibility for her financial affairs? And how can supposedly affable Mike Katchen sleep at night, having needlessly besmirched a private citizen like Paul the banker? Say what you will about “evil” banks, they would never dream of using their weight and reach to disparage one private individual like that. I think we all know of one Paul who spent decades screwing over ordinary Canadians with unjustifiably high fees, but something tells me criticizing that Paul is off-limits for Wealthsimple.
This video is from 2017. This was when fintechs still viewed themselves as bank-killers and before they ran into cost of customer acquisition issues. Wealthsimple has in more recent times advertised a real eagerness to form partnerships. Mike Katchen told the Globe late last year: “If a bank wanted to partner with us tomorrow because they love the way Wealthsimple does business with clients, we would be like, ‘Let’s do it.’" The reporter goes on to say that boasting and trash-talking the incumbents is generally not Katchen’s affable style. Who approves these ads then? So Wealthsimple leaves on the record disparaging remarks about the very people they hope to partner with? And here I thought I was the low EQ one.
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