Matt Levine is a Bloomberg Opinion columnist covering finance. He was an editor of Dealbreaker, an investment banker at Goldman Sachs, a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz, and a clerk for the U.S. Court of Appeals for the 3rd Circuit. Read more opinion LISTEN TO ARTICLE 4:05 SHARE THIS ARTICLE Share Tweet Post Email

This post originally appeared in Money Stuff.



Justin Sullivan/Getty Images Justin Sullivan/Getty Images

Last year Wells Fargo & Co. got in a lot of trouble because its employees opened millions of fake accounts for customers to meet sales quotas. That was bad and illegal. Since then there have been a lot of stories about how terrible things were at Wells Fargo, though, and what is striking about them is that all of the emotional drama -- all of the gut-wrenching, obviously terrible moments -- center around the legal things that the bankers did to meet sales quotas. Nobody really gets that emotional about a fake bank account. For the employees, it just means typing some characters into a computer. For the customers, it means being mildly confused to find a checking account with two cents in it. It's a bland neutral (illegal) solution to a real problem. The real problem, for the Wells Fargo employees, was stuff like this:

He found himself roaming the aisles at Petco, the animal-supplies store, trying to persuade dog-grooming specialists to sign up for small-business services. He would try to time his visits to coincide with managers’ lunch breaks. Even so, he got caught and thrown out. Three times.

That's from this Financial Times story about the difficulties faced by whistleblowers, and about Wells Fargo's high-pressure sales culture, which had branch bankers sneaking into Petco to try to get dog groomers to sign up for banking products. The Petco guy -- a Wells Fargo banker named Nvèr Hasratyan -- is the lead anecdote in the story. "He says the job felt like pushing nightclub invitations to strangers." But no one pays multimillion-dollar fines for pushing nightclub invitations to strangers. Congress wouldn't have held hearings if Wells Fargo had stuck to cruising Petcos for prospects. All of this stuff is fine, normal, legal sales practices. It is just kind of depressing.

So on the one hand the core of the Wells Fargo story is the fake accounts. Nightclub operators don't get in trouble for giving out fake flyers because that is not a thing. How would it be profitable? Of course Wells Fargo's fake accounts don't seem to have been profitable either, but Wells Fargo is a giant bank that has to use broad metrics to measure success, and some of those metrics turned out to be easy to game. Also there was stuff like this:

Former Wells employees say senior managers never directly encouraged anyone to break rules. But the instructions were often implicit. Mr Hasratyan remembers a visit from a district manager who rattled off half a dozen ways to hit targets, adding that most were illegal and all were unethical. Nonetheless, staff picked up on the “reverse psychology”, he says.

But on the other hand the deep resonance of the Wells Fargo story is about something else. What people find troubling is not that Wells Fargo bankers met their quotas with fake accounts, but that they had such exacting quotas to begin with, that there was such a grubby high-pressure sales culture. Partly this is troubling because people expect, or pretend to expect, something different from financial services: Banking is complicated and important, and you want your banker to give you fair objective advice on what to do, rather than be pressured to sell you products. This seems like a bit of an old-fashioned view. Everything, these days, is sales. It is a little unreasonable to expect financial companies to be less commercially motivated than, you know, nightclubs.

But it is what people expect -- and not just customers or journalists or politicians, but even the bankers themselves. The FT story starts, as a lot of these stories do, with the telling detail that Hasratyan "was thrilled to start building a career at America's third-biggest bank by assets." He wanted a professional career, one where he wore a suit and was a trusted adviser to clients -- not one where he pushed nightclub invitations on strangers. Wells Fargo's customers didn't want their bankers to be salespeople, but the bankers didn't want to be salespeople either. The customers wanted trusted advisers, and the bankers wanted to be trusted advisers, but the modern financial economy had no room for that role. They were stuck doing sales.



If you'd like to get Money Stuff in handy email form, right in your inbox, please subscribe at this link. Thanks!

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.