May 5, 2018 –
Billionaire investor Warren Buffett thinks Wells Fargo is a good investment even after the bank’s scandal history.
“The fact that you are going to have problems at some large institutions is not unique,” Buffett said in an interview at his annual shareholders meeting in Omaha, Nebraska.
The latest scandal emerged in a report by The Wall Street Journal.
It stated the U.S. Labor Department is investigating whether Wells Fargo coerced its customers who had affordable corporate 401(k) accounts to swap them for higher priced IRA plans once they exited their jobs or retired.
History of scandals
Mr. Buffett’s support of Wells Fargo raised eyebrows because Wells Fargo has been mired in a quicksand of disgraceful behaviors.
For instance, the financial institution was hit with a $1-billion fine after it was learned the bank charged customers for unneeded car insurance, pushing some customers to default on loans and having their cars repossessed.
The Federal Reserve has also reprimanded Wells Fargo over “consumer abuse.”
In 2016, Wells Fargo created millions of fraudulent accounts without their customers’ permission. CEO John Stumpf immediately resigned. He was replaced by CFO and President Tim Sloan.
“The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office.”
-Dwight D. Eisenhower
Mr. Buffet believes Well Fargo’s wrongdoing was merely urging its employees to create the accounts.
Wells Fargo’s leadership
The Oracle of Omaha thinks the scandals won’t hurt the bank long term as long as Mr. Sloan remains as CEO.
“I see no reason why Wells Fargo as a company…going forward is in any way inferior to the other big banks with which it competes,” he said. “We have a large unrealized gain (in the stock). I like it as an investment.”
Let’s hope Mr. Buffett proves to be right.
From the Coach’s Corner, here’s a relevant article on B2C selling:
Want a Wealthy Clientele? Lessons from Investment Firms — If you want a wealthy clientele, lessons from investment firms show you must focus on your relationship skills. You need to provide exclusivity, special client experiences with generosity and product quality.
Here are relevant business-banking articles:
6 Best Practices to Capitalize on a Business Loan — Whether it’s a business loan, a cash advance against your credit-card income, equipment lease or purchase or commercial mortgage loan, don’t have stars in your eyes. Be pragmatic.
4 Best Practices to Refinance Your Business Loan — Would you benefit by refinancing your small business loan to get a better interest rate and lower loan payments? Certainly, you would benefit from a lower interest rate and loan payments if you have cash flow issues. But there are other matters to consider before refinancing your loan.
To Get the Lowest-Cost Small Business Loan, Here Are 6 Tips — The U.S. Senate’s rollback of some Dodd-Frank’s banking rules appears to be a good sign for small banks and small-business owners.
Applying for Bank Loan? Here’s How to Shorten the Process — Business owners generally have two concerns when trying to get a bank loan or line of credit. Either they can’t qualify or they face scrutiny beyond belief. Wouldn’t it be great to save time and shorten the process?
Debt Consolidation Will Sink You without These 6 Tips — If you’re not careful in your debt-consolidation plan to bundle your debts for a lower interest rate and minimum payments, you might get into more financial problems. Here are six precautions.
5 Tips to Build Your Business Credit, Access Capital — Sometimes a business needs access to capital to grow. But in order to grow, it helps to build credit profiles to land financing.
“The supreme quality for leadership is unquestionably integrity. Without it, no real success is possible, no matter whether it is on a section gang, a football field, in an army, or in an office.”
-Dwight D. Eisenhower
__________
