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FCA: Reform of banks’ sales incentives at ‘top of the agenda’

John Griffith-Jones
FCA chairman John Griffith-Jones

The Financial Conduct Authority says concerns about banks’ sales incentives are at the “top of the agenda” and has refused to rule out an outright ban in the future.

Speaking to the Treasury select committee this week, FCA chairman John Griffith-Jones said he understands the way incentives can affect staff beahviour.

He said: “The objective is for the customer to be treated fairly and whether it requires a ban on incentives as opposed to moderating it, we should wait and see.

“It is absolutely at the top of our agenda. FCA chief executive Martin Whetaley did a short piece of work recently studying 22 banks’ systems and we did not like what we found.

“The first thing we must do is to understand the situation because there are different schemes in different banks. To the extent we believe they are leading to bad conduct then we will insist they are changed.”

Griffith-Jones welcomed moves by Lloyds Banking Group, Barclays and the Co-operative Bank to incentivise staff based on customer service levels instead of sales targets.

Lloyds is currently under FSA investigation for its sales incentives and the FSA is promising a crackdown after its review over the summer.

Bloomsbury Financial Planning partner Jason Butler says: “Talk is cheap, let’s see some action. It is an enormous task to turn around a rotten culture and malevolence towards customers.”


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There is one comment at the moment, we would love to hear your opinion too.

  1. I don’t believe it is an enormous task to turn around a rotten culture and malevolence towards customers.

    All the powers that be need to do is to ensure that the services of ALL intermediaries are subject to adviser charging and that not less than a third of whatever total AC proposed is chargeable before any product recommendations are made. Why need the solution be any more complicated than that?

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