News Summary

• Incentives are commission structures and other motivational benefits that reward staff and agents for prioritizing sales volumes.
• Volume-based incentives, however, need to be decoupled from any incentive to mis-sell.
• Banks could develop a matrix that indicates which products are potentially suitable for a customer, ranking them by priority.
• This prioritization should be based on a risk analysis of product features, risk-return attributes, time horizon, complexity, fee structure etc, mapped to the customer’s age, income, level of financial literacy and risk tolerance.