We receive many enquiries from readers about debarments, like this one last week:
The reason why I was debarred was that I helped a customer with a loan application over the phone. I told the customer not to disclose too many expenses as the loan would be declined. That was picked up by the quality control department and led to my debarment.
Production targets is seen as one of the biggest reasons for miss-selling, and most direct marketers, despite blaming commission as the greatest sin on earth, actually do pay “success bonuses” to better producers, which obviously lead to unfair pressure and conflicts of interest, as indicated in the example above.
No doubt, representatives sitting with an “execution of sales only” text in front of them are highly unlikely to stick purely to the script. What do they do when a client asks a question?
“Sorry, I cannot answer that, it is not in the script. Let me refer you to my key individual.”
This is akin to expecting a tied agent (“product supplier agent” in the new parlance) to say to a client: “Sorry, my employer’s product is not as good as that of our main competitor. I suggest you rather approach them.”
What would the average man or woman, whose income is reliant on successful sales, do in such a situation? Obviously, attempt to salvage the sale.
But does it lead to fair outcomes for clients, which is the foundation of market conduct regulation?
Methinks there is still some serious consideration required on whether the implementation of “Execution of Sales only” will bring anything new to the table, or actually contribute to fairer treatment of clients.
It merely perpetuates regulation by exemption, and is anything but pre-emptive.