The Dumbing of American Financial InstitutionsSubmitted by Financial Planning Hawaii on February 25th, 2014
Channeling my inner Mark Twain
Anyone who knows me well can attest to my uninhibited disdain for the bureaucracy and incompetence at financial institutions. As a financial planner, I interact daily with banks, brokerage firms, and insurance companies on behalf of our clients. The ineptitude Alicia and I encounter on a regular basis is mind-numbing. The following are just a few examples to support this position:
- 5 years ago, a brokerage firm received a written request from a client to mail a $5,000 check payable to his child’s 529 College Savings Plan. Upon receipt of the authorization letter, the brokerage firm immediately debited the client’s account for the specified amount and mailed a check in an unaddressed envelope. As such, the check was never received nor cashed nor was the money ever credited back to the client’s brokerage account. Apparently the firm had not thought to institute a policy of crediting funds back to an account after the 180 day “good delivery” period had expired.
- An insurance company with which I regularly do business randomly changed the beneficiary designation on one of my own IRA annuity contracts from my wife to one of my clients.
- A well-known bank recently sent poorly written letters to certain account holders who had not had transaction activity in the past twelve months advising that the accounts were in danger of being escheated to their respective states’ lost property divisions. To make matters worse, the bank began calling these people individually and asking them to provide their social security numbers (to a complete stranger!) to “ verify the accounts”.
I wish I was making this up, but, unfortunately, such bureaucratic bungling is both true and rampant. On a humorous note, today’s editorial rant was inspired by a recent phone call I received from my local bank. I was in the process of transferring funds from one of my business accounts to another, and the nice young gentlemen who called advised that the bank was concerned that size of the deposit was larger than normal and that the bank needed my authorization to accept the deposit. With a straight face I thanked the man for his diligence, and gave him blanket authorization to accept all future deposits to my accounts from anyone who wishes to give me money. What worries me is whether the bank would be as diligent in keeping me abreast of unusually large withdrawal requests.