Compliance

With all funny business that has gone on in the banking sector over years, here and abroad, you would have thought that compliance to the "right" way of doing things would be better today. Why "right" and not "correct"? Cos there is no friggin right way given the conditions we operate under.

Let's see, we have the interests of 3 distinct groups of people;
1) Bank (Shareholders, entity)
2) PFCs/RMs (Personal Financial Consultants/Relationship Managers, Fulfillers of Dreams)
3) Customers (Investors, Savers, Borrowers)

Now let's see... As a PFC, i'm supposed to analyse a customer's financial needs and suggest the best way forward in meeting his/her aims. Be it savings for retirement, money for a child's education or just plain money to buy a car. So really, i wouldn't call it a fiduciary duty, but i should be doing my best to ensure my customer gets what he needs. Apart from just my conscience, it is mandated by law that i have to find out the person's needs and recommend products based on those needs. Yay! Alighnment between the Law and my innermost desires (partly at least).

Problem is, there are also the interests of the bank to consider. What is the purpose of a bank? To make money, simple as that. Anything wrong with that? Of course not, everyone has to eat right? And we all expect our shares in whatever company to appreciate, not excepting banks.

Now, PFCs/RMs are the front end in selling products to customers and though investment products don't make up the majority of bank earnings, it has certainly been taking a bigger and bigger share of the revenue pie. So how do banks encourage their salespeople to sell more? By having sales targets that have to be met in order for commissions to be paid out. This is where the disconnect occurs. When we get specific sales targets for specific classes of products, PFCs/RMs would darn well try their best to meet them, afterall, it is in their interests to do so. If we don;'t meet those targets, we don't get our commissions. To hell with the customers, they can jolly well buy whatever product whose target i have not met! (Pretty extreme sounding and i won't do that). But hopefully u can see the conflict of interests here.

Right now, i get a basic wage and will get commissions should i meet the dreaded revenue point tagets. While i don't see a way of completely decoupling wages from sales, perhaps there could be 3rd part of my total wage. Something based on the softer side of things. Whether the customer has gotten the product MOST appropiate to him/her. Not just somewhat appropiate or very appropiate but MOST appropiate from the list of products i have.

Very very raw idea i know but there must be a way to make things better.