The FCA said it expected firms to “consider carefully whether they have incentive schemes that increase the risk of mis-selling, review whether their governance and controls are adequate, and address any inadequacies” and would select firms for online assessment.
The regulator published a One Minute Guide on its website to help firms prepare for assessment following its publication in January of finalised guidance for self-assessment.
It will notify selected firms and carry out some follow-up work with a number of the firms who are selected for the online assessment.
The regulator said:”Our guidance applies to all firms in retail financial services whose staff deal directly with customers and are paid based on the results. This includes whether they are employed or self-employed, or paid a basic salary or not.
“One example of a financial incentive is where advisers or sales staff have 100% variable pay based on a share of commission or fee income.”
“We do not expect you to remove incentives, but we do expect you to manage the risks created by them.
“We also expect you to investigate recurring problems, take action and pay redress to consumers who have suffered harm.”
