The HR World invited me to lead a round table discussion for a select assembly of senior HR professionals. I was delighted to share and explore with the invited guests my experiences as an Interim HR Director.

After the infamous mis-selling of PPI became the Financial Conduct Authority’s (FCA) main focus for review in January 2005, their subsequent exploration of what drives sales malpractice has shaken the foundations of the Financial Services (FS) world. Its goals, results, attitudes and drive are under both legal and moral obligation to reinvent themselves, making it impossible for them to operate as they once did. Following the FCA’s focus on sales practice, The HR World Debate centred around the effect the recent changes to incentive schemes have had on organisations. I wanted to explore with the Debate guests the impact of this focus, and how HR can support the transformation.

In the past, the FCA (or the Financial Services Authority as they were known) primarily concerned themselves with treating customers fairly (TCF), and encouraged businesses to incentivise their staff using ‘measures solely aimed at rewarding the fair treatment of customers’. In their 2006 Thematic Review, they outlined the value and necessity of ‘principles-based regulation’; of letting one’s conscience govern rather than succumbing to financial motivation. They envisaged a world in which honourable ‘principles are themselves rules’.

Unfortunately, despite the focus on TCF, this vision has not (yet) been fulfilled. The FCA’s attention has now spread to all areas of FS: banks, asset management businesses, life companies and general insurance businesses. This refocus on incentive schemes has been the catalyst for the recent changes across the FS sector. The issues I therefore raised at The HR World Debate centred on how previous incentive schemes have driven poor sales behaviour to the detriment of customers, and the practicality of the changes the FCA are now asking businesses to make. As businesses have responded by taking drastic steps to ensure that they are compliant, that their incentive schemes drive the right behaviours and that they are customer-focused, I ask the question; have we, in our attempts at ultimate compliancy, taken the fun out of selling?

The selling of financial products is precarious by nature, and must be treated with great care. The consequences of making an ill-advised choice or skimming over the fine print can be extremely difficult and timely to fix; it is therefore imperative that those selling them are deserving of their customers’ trust. Many FS organisations may have lost that trust, but if they adopt a new customer-centric approach driven by HR and compliance, the damage may not be permanent. What is becoming increasingly apparent is that it is largely the HR function’s responsibility to drive the change which will enable businesses to earn that trust back.

- Steve Pratt, Interim HR Director, Swinton Insurance


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