So what is the solution?

So what is the solution?

A:

Regulators around the world have begun imposing a legal “best interest duty” on financial services providers in an effort to ensure that those working in financial services put the interests of their customers ahead of the interests of the financial services provider. This includes a ban on conflicted remuneration. Alternatives to conflicted remuneration include pay models that reward skill and encourage ethical behaviour. Australia, the UK, Canada and USA have all made some changes to remove or limit the existence of conflicted remuneration in financial service. In Australia conflicted remuneration is banned in connection with ‘wealth’ products such as superannuation, life insurance and term deposits but there is no current ban on conflicted remuneration for ‘debt ‘ products like loans and credit cards. In the UK all conflicted remuneration is banned. FSU has secured new pay models that begin to de-link pay from targets in major enterprise agreements in 2016.  A combination of industry wide regulation banning conflicted remuneration by legislation and new pay frameworks in Enterprise Agreements will ensure that pay in finance adds to trust and confidence rather than erodes it.

Be the first to comment

Please check your e-mail for a link to activate your account.