Panel calls for the industry to act now to stamp out inappropriate incentives
5 September 2012
Responding to Martin Wheatley’s speech this morning at Reuters the Financial Services Consumer Panel welcomed his commitment to ensure that all firms have a culture that puts their customers first.
Mr Wheatley spoke about the need to shift the industry’s perception of customers, to think of them as people to serve, rather than people to sell to. He acknowledged that in the drive to increase profit staff have been encouraged to sell products though incentive schemes, bonuses and rewards which are structured in a way which leads to consistent problems with mis-selling. We agree – it is obvious. It is a great pity that it has taken the FSA so long to act to stamp out this disgraceful phenomenon.
Adam Phillips, Consumer Panel Chair commented:
“We welcome the publication of the FSA’s guidance consultation and the regulator’s commitment to action. However, the FSA has been slow to respond. Consumers continue to suffer from inappropriate pay and bonus practices in banks and other financial institutions. Incentives that encourage client service staff to make a profit at the expense of the customer need to be removed now.
The regulator has made a commitment to change the industry’s behaviour. We hope that this time the industry will get the message and not try to find a way to get around the rules as they have done in the past.”
- The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
- The emphasis of the Panel's work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA's remit. More information about the Panel's work
- Panel members are appointed to serve a maximum of two terms of three years.