Canada’s Big Five banks put pressure on staff to meet targets for mutual fund sales, sometimes causing them to recommend unsuitable products, a report by the Ontario Securities Commission and the Canadian Investment Regulatory Organization found. (The Logic)

Talking point: The report, based on a survey of nearly 3,000 mutual fund salespeople, is part of a review of the big banks’ sales practices the OSC announced in November. Almost one-quarter of salespeople surveyed couldn’t identify the correct definition of a management expense ratio, a foundational concept for calculating the fees that must be paid by investors, which OSC executive vice-president of regulatory operations Sonny Randhawa called “a red flag” in an interview. The survey results don’t indicate a widespread problem of banks selling unsuitable investments and it’s not illegal to set sales targets and track advisor performance, he said. Randhawa said the OSC’s review is ongoing and the organization will decide whether action needs to be taken once it has all the facts.