Giving evidence in front of the Treasury Select Committee, Wheatley said during its investigation into Lloyds sales-incentive schemes, which resulted in a £28m fine, advisers were “simply trying to meet their sales targets”.
Wheatley said many of the advisers involved in these schemes were relatively junior in organisations.
He said: “They were recipients of badly designed schemes. In many cases it is true to say they themselves weren’t trying to do something wrong they were simply trying to earn their bonuses in a system designed for them by the bank.”
Committee member Mark Garnier, MP for Wyre Forest, said Wheatley’s attitude towards the individuals selling the products sounded like a “post-modern Nuremberg Defence”.
The Defence refers to a legal strategy employed by many defendants at the Nuremberg war crimes trials who claimed that they were not guilty of the charges against them as they were “only following orders.”
But in this instance individuals were striving to hit bonus targets rather than following orders.
Garnier argued sales staff should act as the first line of defence in delivering good standards and not relinquish responsibility to pursue a financial goal causing serious consumer detriment in the process.
Wheatley argued that behaviours which emerged from the Lloyds investigation were diverse – some of which should clearly not have happened particularly in 2012 when lessons from the past should have been learnt.
But at the other end of the spectrum some staff were just trying to hit targets.
Garnier said Wheatley’s “Neuremberg” response would not drive forward better behaviours.
The FCA has said that major changes had now been made to banks’ incentive schemes.
But when asked if sales advisers which had the potential to cause serious harm to consumers should be included in the certification regime Wheatley said the FCA was undecided and would consult on this in the summer.
