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FSA to end aggressive bank sales structures

Financial Conduct Authority chief executive designate Martin Wheatley is set to announce plans to crackdown on incentive schemes used by banks, building societies and insurers.

Giving his first speech to the City tomorrow, Wheatley will announce plans to toughen up on certain sales incentive schemes the regulator believes are unfair to consumers.

The FSA will publish a report based on a year-long investigation into staff reward schemes used by 20 major financial services firms.

Advisers have been calling for Wheatley to stamp his authority on the industry by putting an end to the aggressive incentive schemes used by certain firms which are unlikely to be stopped by the RDR.

The FSA wants firms to move away from structures which reward staff for the number of products sold to ones that reward staff for doing what is best for the customer.

The FSA signalled it was ready to take action against some schemes as part of its retail conduct risk outlook in March.

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  • Fat Mortgage Bloke 5th September 2012 at 6:40 am

    Erm….Stable door and horse has bolted springs to mind!!!

    Still My Lady has just got PPI money back on her Black Horse Loan!!!

  • Jon T 4th September 2012 at 1:05 pm

    Sensible in principle, but, as always, the devil is in the detail. I will watch the progress of this initiative with great interest.

  • RW 4th September 2012 at 10:27 am

    Funny…. IFA’s stopped single product incentives many years ago. Amazing to hear the FSA are now stamping hard on the Banks. They are so on the ball about 8 years to late!!!!!

  • GARY 4th September 2012 at 9:46 am

    The banks won’t like that.
    It means they’ll have to go back to paying branch staff a reasonable salary again.

  • Suhan Srinivasan 4th September 2012 at 9:44 am

    This is the most sensible thing the FSA has done. If implemented properly, it will do more good for the consumers than all of the RDR. To reduce mis-selling, you need to remove aggressive targets.

  • Bobby 4th September 2012 at 9:09 am

    How does this square with allowing banks to do wholesale non advised mortgage and insurance sales ?

  • We're all doomed!!!! 4th September 2012 at 9:09 am

    Banks doing what’s right for customers?

    Good luck Martin!

  • Paul Faithfull 4th September 2012 at 9:06 am

    Wouldn’t it be radical to scrap all “sales targets” in banks and tell staff to concentrate on delivering first class service. Think of the time saved by not having to go on countless audios reporting hourly and daily figures.

    Customers may begin to have faith int eh banking system and as a result buy many more products as a result of happier staff providing real service to them.