Sales of financial products should be commission-free in an attempt to clamp down on mis-selling at banks, the UK's financial regulator has said.
As part of a wider effort to get a better deal for banks' customers, the Financial Services Authority (FSA) published a review into the way banks reward their staff for selling bank accounts, insurance and loans.
UK banks have come under fire repeatedly for pushing financial products onto customers that do not need them - the mis-selling of payment protection insurance (PPI) alone will cost the banks £9bn in compensation.
They have been accused of creating an aggressive sales culture in which staff under pressure to hit targets fall short of meeting the FSA requirement to provide "clear, fair and not misleading" information about what they were selling.
The regulator's managing director, Martin Wheatley, said there have been "serious failings", and that some current sales practices have made mis-selling inevitable
"What we found is not pretty. Most of the incentive schemes we looked at were likely to drive people to mis-sell in order to meet targets and receive a bonus, and these risks were not being properly managed," he said.
In a speech this morning, Mr Wheatley highlighted a change in banking culture.
"Why is it that every time I walk into the bank to do something simple, like pay my credit card bill, the person behind the counter asks me if I would like to extend my credit, take out more insurance or look at their competitive mortgage rates?" he asked.
"Banks for me used to be a service – a place where you would go in, stand in a queue, have a pleasant chat with the clerk and go about your daily business.
The reward schemes must be changed to benefit the customer - not just the sales team - and there should be a fundamental shift in the culture at the top of banks to make this work, he said.
"CEOs are ultimately accountable for the way their staff are incentivised, so we expect them to take a real interest in fixing this."
The review of commission is part of a drive to make the selling of products at banks, insurers and investment companies more transparent.
Mr Wheatley, who is also conducting an investigation into the Libor rate-rigging scandal, will continue to push this agenda when he heads up the Financial Conduct Authority.
The new body, which will replace the FSA next year, will have a stronger remit to protect customers.
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