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End the bonus culture at banks

Sesame wants the FSA to create a level playing field by taking away bonus structures for bank staff who sell products, alongside moving advisers away from commission.

At the round table, Sesame executive chairman Ivan Martin said bonuses for achieving sales targets are worse than commission.

He said: “Salespeople in banks are on daily and weekly targets and they get bonuses for selling. If they do not sell, they get fired. It is a very high-pressure environment.

“I would say let’s have a level playing field and if commission is being squashed in every other name, then we should look at the bonus structures and the incentive plans that enable banks to sell so much.”

Martin refuted claims that banks can supply advice at a lower cost than independent advisers. He said: “They can’t, in my view. The only reason they could say they do is they do not apportion the cost of their retail branches to the advisers that sit there. So it is not a level playing field and for them to say they are more efficient and more productive is not true.”

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