Incentives: good and poor practice

INCENTIVES

clock

The Financial Services Authority (FSA) this morning issued a guidance consultation on minimising the risks to consumers from financial incentives.

It follows a review of current practices, in which it found 20 out of the 22 firms assessed had features in their incentive schemes that increased the risk of mis-selling. The FSA wants firms to tighten their governance and controls and identified areas for firms to focus on and examples of good and poor practice from its review. Emphasising quality Bonus and incentive schemes need to reward good compliance (selling the right way) with a sufficient deterrent to penalise poor behaviour or mis-selling. Good practice Taking action on poor quality A firm took strong action when ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Regulation

FCA's targeted support rules set to take effect from April 2026

FCA's targeted support rules set to take effect from April 2026

Regulator plans to open application gateway for firms in March

Isabel Baxter
clock 11 December 2025 • 5 min read
FCA sets out plans to simplify complaints regime

FCA sets out plans to simplify complaints regime

Including requirement for firms to report complaints involving vulnerable clients

Isabel Baxter
clock 04 December 2025 • 2 min read
FCA looks to boost transparency of ESG ratings providers

FCA looks to boost transparency of ESG ratings providers

Regulator opens consultation

Michael Nelson
clock 01 December 2025 • 2 min read