On 5 September 2012, the FSA published a guidance consultation on the risks to customers from financial incentives (GC 12/11).
GC 12/11 includes proposed guidance for firms on:
- incentive scheme features that increase the risk of mis-selling; and
- managing the risks and governance of incentive schemes.
The publication of GC 12/11 marks the launch of what the FSA is calling its initiative to outlaw flawed sales bonuses that encourage mis-selling and was accompanied by the publication of a speech by Martin Wheatley (Managing Director, FSA and chief executive officer designate, FCA) entitled ‘The incentivisation of sales staff – are consumers getting a fair deal?’. In his speech Mr. Wheatley explained that the FSA’s initiative – in which he would be taking a lead role – was aimed at ensuring that financial institutions view their customers as people to be served, as opposed to people “to sell to”.
The FSA invites firms to respond to GC 12/11 by 31 October 2012.