Canadian fintech company Planswell is facing complaints over unusual hiring practices, roughly five years after its corporate reincarnation from a robo-adviser into an online platform that connects financial-services professionals with people seeking advice.
Some former employees are voicing their frustration about the company’s boot camp-style hiring program for entry-level sales representatives.
Through the program – which the company’s chief executive says is currently on pause – Planswell would test cohorts of 15 to 20 new recruits by asking them to cold-call potential customers for short stints on a freelance basis.
Candidates would receive $100 for every call that ended with a potential client agreeing to set up a meeting with a staff sales representative at Planswell. Those who showed promise moved on to a 90-day probation period as account executives, an employee role. But the company’s current compensation structure – which treats a small salary as an advance on commission – made it hard for new hires to earn more than minimum wage, some former employees allege.
Planswell offers free financial plans online and sells the information it collects from users, along with other services, to financial advisers seeking to grow their client lists.
The company was once a prominent startup that attracted financing from Bay Street giants. But the firm shut down in the fall of 2019 after failing to secure more funding from investors. It reopened in 2020 under new ownership and with a different business model that connects households who use its free platform with external advisers, rather than helping them in-house to reach their financial goals.
Canadian robo-adviser Planswell shuts down after investors pull planned financing
Chief executive officer Eric Arnold says the company’s group-recruitment strategy has helped it spot some of its top talent and provides an opportunity for people who have never worked in sales to try their hand at the job.
Although some current and former employees who joined Planswell between three and four years ago say the program worked well for them, more recent recruits describe a different reality.
Base pay for junior hires has dropped. Two former employees, who worked at Planswell for a few months earlier this year, said the company changed its compensation structure shortly after they were onboarded as full-time employees, raising sales goals and making it difficult for newcomers to earn more than minimum wage in commissions.
Devon Byrne, in Truro, N.S., and Gerald Godinho, in Hamilton, said the company’s recruiting program, far from being an on-ramp to a well-paying job, proved a costly career and financial detour that left them scrambling to make ends meet.
Mr. Byrne also said that, because he didn’t meet minimum sales targets, he was told he hadn’t fully earned his paycheques and owed the company money.
For Mr. Byrne, who was working as a dump-truck driver but had struggled with chronic pain after breaking his back in a motor-vehicle accident, the recruitment program at Planswell represented a chance to try out a fully remote, sit-down job.
Mr. Godinho, who had worked both as a sales professional and in the financial industry, thought the job would be an opportunity to leverage his contacts among financial advisers and money managers.
The gig itself was straightforward: They had to cold-call financial planners and convince them to set up a meeting with Planswell’s account executives, employees working as more senior sales representatives who would pitch the prospects on the company’s products.
Speaking to the new recruits in a group call, Mr. Arnold said successful candidates would be hired as account executives. In that role, he said, strong performers could earn between $90,000 and $140,000 a year, though he warned that up to 80 per cent of newcomers wouldn’t make the cut.
Both Mr. Byrne and Mr. Godinho signed on as account executives in February after a brief period working as freelancers.
A copy of a recent account executive employment contract seen by The Globe and Mail shows that pay for the role is entirely based on commission, with Planswell providing $3,016 a month as an advance on the commission actually earned. The monthly draw amounts to $17.40 an hour for a 40-hour workweek, slightly above Ontario’s current hourly minimum wage of $17.20.
But in early March, Planswell changed its sales targets, setting ambitious new goals that made it challenging for new hires to even meet the sales quota that guaranteed the commission draw, according to Mr. Byrne and Mr. Godinho.
Still, Mr. Godinho believed he was showing promise and quickly improving. In April, days before the end of his three-month probation, he contacted human resources to inquire about the benefits package he’d be entitled to. In response, he said, the company told him he’d be let go. And because he was still on probation, he didn’t receive severance.
Toward the end of his own probation period, Mr. Byrne said, his managers told him he owed the company money because he hadn’t met the minimum sales quota. They proposed extending his probation so he could catch up on his quota, he said.
But after taking two weeks of unpaid leave to undergo surgery in late April, he said, he’d earned so little that he was struggling to pay his and his partner’s bills.
So he skipped a day of work at Planswell to take up a short stint similar to his truck-driver job, which paid up to $48.55 an hour. When he told Planswell that he’d taken an unauthorized day off, he was let go, he said.
Mr. Godinho and Mr. Byrne said no one from their cohort remained employed beyond the probation period.
Islam Haider, a third recruit who was recently hired as an account executive after participating in the group program, also said he couldn’t exceed the minimum sales quota tied to minimum-wage pay.
Mr. Haider, who joined Planswell in April, said his earnings were significantly lower than what he’d made in his first-ever sales job the year before, he said.
However, Mr. Haider, who is based in Guelph, Ont., added that he believes it’s possible for top-notch sales professionals to earn a good living at the company. He left the job after a few weeks for personal reasons, he said.
Mr. Arnold, the company’s CEO, said Mr. Godinho and Mr. Byrne were let go because they did not meet expectations. The company considered extending Mr. Byrne’s probation period because he’d missed two weeks of work, but ultimately decided against it, he said.
He also rejected the notion that newly hired account executives might be confused about their pay structure.
All account executives are employees and “well aware of their commission structure at all times,” he said via e-mail. And all employees earn at least the minimum hourly wage, he added.
But the employment contract viewed by The Globe does not mention that account executives are entitled to minimum wage. Instead, the document says the monthly draw of $3,016 will be reconciled against actual commission earned. If amounts earned fall short of the draw, they will be clawed back from future payments, according to the document.
In Ontario, companies must generally ensure that even employees who are paid entirely through commissions earn at least the hourly minimum wage, although the same guarantees do not exist for contractors, said Deborah Hudson, an employment lawyer at Toronto-based Hudson Sinclair LLP.
Interviews also indicate Planswell used to pay junior sales representatives significantly more.
In Sudbury, Jack Cushnie, who worked at the company from 2022 until last spring, said the group-recruitment program provided him with mentorship and guidance, making it easier to transition into a sales career.
“I wasn’t too great at it when I started off, so it’s nice having the opportunity just to dive in and be provided a bunch of training,” he said.
But Mr. Cushnie also said he was paid around $55,000 a year as a base salary when he started off as an account executive.
Mr. Arnold said the company later transitioned to a 100-per-cent commission model for sales staff, something he said provided the opportunity for higher earnings for top employees.
The company paused the group-hiring program in May after receiving too many applications from highly qualified candidates for whom a more traditional recruitment process made more sense, Mr. Arnold said.
It currently has 38 full-time employees.
While Mr. Godinho quickly moved on to a different job in sales, Mr. Byrne is still looking for employment, as his old job is no longer available. Working for Planswell, he said, left his household finances in shambles.
“I basically went without a paycheque or anything higher than I would have made at McDonald’s,” he said. “I was making $50 an hour in overtime last year and now we’re damn near poverty because I did take the gamble.”
The current allegations represent at least the second time that Planswell has faced labour-related issues, after a former employee alleged sexual misconduct by an ex-senior executive in 2019.
Read more on The Globe and Mail
