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Banks get an ultimatum from the FSA

The FSA has launched a blistering attack on the way that banks incentivise their sales forces to sell volumes of products without suitable advice.

Managing director of retail markets Clive Briault has lambasted banks over poorly designed products and volume-driven salesforces, saying if banks do not abide by the regulator’s principles – in particular, the regulator’s Treating Customers Fairly initiative – it will have to consider tougher enforcement action or more detailed and intrusive regulation.

Speaking at the British Bankers’ Association annual retail banking conference on Tuesday, Briault outlined his concerns about the treatment of consumers by retail banks.

He revealed the FSA has its eye on reward systems that incentivise salesforces and branch staff to deliver volume targets without any measurement of the suitability and quality of the sales.

He also highlighted cases where products have been developed without assessing which consumers they will be suitable for or how they will be sold and advised upon in practice.

Briault said it is the responsibility of senior management to build the principles of Treating Customers Fairly into their firms’ culture.

He said: “If firms do not embrace the principle of Treating Customers Fairly, we will reconsider how best to achieve the fair treatment of customers, be it through the introduction of ever more detailed rules or tougher enforcement action.”

Syndaxi Financial Planning director Robert Reid says: “It is about time banks understood the value of advice and the problems that flow from being so focused on the sale of a product that nothing else matters.”

Plan Invest Group joint managing director Michael Owen says: “I know damn well that we IFAs are going to be very strictly regulated and I just hope that this will be the case for banks too.”


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IFA Millfield is reviewing its relationship with financial software company Sirius and is believed to be dropping the company altogether.


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