Finalised Guidance on Performance Management

Following the FCA’s recent guidance consultation, it has now published Finalised Guidance 15/10 ‘Risk to customers from performance management at firms’ that can be found here.

In this document the FCA clarify the importance of culture within a firm to ensure the customer is at the heart of how a business is run.

It looks at performance management that includes:

  • formal processes – such as appraisals and underperformance procedures;
  • sales targets (or their equivalent); and
  • other less formal day-to-day interactions and communications between sales staff and managers about sales results that influence behaviour (both written and verbal) – much of which may not be documented.

It highlights practices that can create undue pressure and, very importantly, it gives examples of good practice.

The FCA summarises the expectations on firms as follows:

All firms with staff who deal directly with retail customers should read this report and consider:

  • how their approach to performance management may increase the risk of mis-selling;
  • whether their governance and controls are adequate; and
  • taking action where required to ensure the risks are adequately managed.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

This is an important document that all senior managers and staff involved in performance management should read.

There is no excuse for applying undue pressure on staff.

Culture starts at the top; combined with good governance and controls, this should lead to good business practices.

Action Required By You

  • Read the Finalised Guidance document carefully;
  • Ensure all staff involved with performance management are aware of the content;
  • Note the good (and poor) practices and assess yourself against these objectively;
  • Ensure you have the systems and controls in place to mitigate any poor practice;
  • Lead by example to create a positive customer centric culture within your firm.

ATEB clients should speak with their account manager if they want their standard assessing; otherwise contact ATEB here to find out how we can help.

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About the Author

Steve is an ATEB Director and has a deep understanding of all matter regulatory, built up over his 30 years + in the industry. With a training background and a technical brain, he overseas numerous complex projects and client implementation work.

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