< p>You may soon begin to notice that many of these articles from the SimplyBiz Group talk about the FCA’s focus on a number of different areas and wonder if I’m indulging in a spot of hyperbole.  However, as those of you already familiar with the FCA will be well aware, it is like a regulatory hydra; more than equipped to keep a keenly focused eye simultaneously on multiple regions of interest!

I, however, will only be looking at one regulatory area each week and this time it’s a – you guessed it! – keen area of focus for the FCA: staff incentives.  

Incentives are by no means just an issue for the regulator in relation to consumer credit; it’s been carrying out research into reward schemes across financial services since 2012.  However, it is now looking to bring its newly adopted areas of responsibility in line with the rest of the sector.  The FCA’s initial findings revealed concerns around a number of areas including the complexity of incentive schemes, a lack of awareness, management of risk and conflict of interest, for example, when a member of staff received a bonus based on the business generated by staff that they supervised.  


The FCA released a few examples of what it felt was ‘good practice’ when it came to staff incentive schemes:
•    using behavioural measures such as customer outcomes rather than simply sales figures to measure performance;
•    senior management actively listening to frontline staff about the culture within  the firm and the pressures they face, supporting an open environment which encourages staff to speak up and raise concerns;
•    Using information from staff turnover and exit interviews, exploring issues where needed;
•    Regular staff surveys which address the extent to which staff may feel under pressure over sales results and the causes of this.

In the final analysis, there is nothing wrong with rewarding success but as a firm regulated by the FCA, you must ensure that this is delivered in a way which is consistent with the best interests of your customers.  

AOBP’s Compliance Hub, powered by the Consumer Credit Centre, contains all the tools and guidance you need to ensure that your business adheres to the FCA’s requirements surrounding staff incentives; this is updated regularly in line with the FCA’s ongoing review, and it is imperative that you keep up-to-date with changing regulation.  The SimplyBiz Group, of which the Consumer Credit Centre is a part, has many years of experience and a highly skilled specialist team, and that’s why AOBP has chosen to partner with us.  

If you have any questions on the information in this article, or any other area of regulation or compliance support, please don’t hesitate to get in touch with the Consumer Credit Centre team on 01484 443424.

David Golder
Client Proposition Director
Consumer Credit Centre
SimplyBiz Group

Webinar Flash
MCD confusion? Save the date!
If the European Mortgage Credit Directive affects you, why not join us for a webinar on Monday 21st September at 10am which will look at the impact this will have on your firm and its processes.
More information in next week’s article.