TodayOnline - Tuesday, October 14, 2008
AS HONG Kong investors took to the streets, seeking redress for the failed Mini-Bonds series structured by Lehman Brothers, about 1,000 Singapore investors gathered at Hong Lim Park over the weekend.
Their plight triggered memories of my previous job, and it dawned on me that I could have been responsible for their indignation, either directly or indirectly.
You see, I used to work for a bank, selling similar structured products, unit trusts and insurance to the bank’s customers. Among them were retirees, housewives and professionals — some with high risk appetites, others not at all. And it was my job to convince them of the benefits of the products the bank was promoting.
The remuneration package was structured such that sales performance received a significant weightage when my performance came up for review.
Also, there was a quota of financial products to be sold, so that I did not incur a huge penalty in commissions. For example, if there was enough revenue clocked from unit trusts, but not enough insurance or housing loans revenue,I would lose a sizeable sum.
There was always the pressure to meet any shortfalls in the designated monthly quota, so that both career and salary did not suffer.
There was also external pressure from management. I was hounded daily by my superiors on the shortfalls and sometimes, in order to fulfil the cluster’s overall target, I was told to concentrate on certain products that were not moving. Often, these were dangled with attractive incentives to ensure that I would be more willing to sell them over others.
But with the carrot also came the stick: There was a ranking-list flashed at meetings, with the names of staff who did not meet their sales targets. It was a public shaming routine, and to meet the targets, my weekends were usually spent at roadshows.
Operating in such a high-pressure environment meant that some sales staff resorted to employing strong sales techniques to get the customer to sign on the dotted line.
One senior manager even said that customers were only interested in benefits, so it was advisable to come up with a pitch that maximised these benefits and minimised the costs.
At times, scripts were handed to frontline workers. We were forced to memorise them for a flawless presentation.
Perhaps to avoid accusations of “mis-selling” in future, the time is ripe for financial institutions to review their procedures for assessing sales staff. They should tweak the promotion criteria, which relies heavily on sales results. Benchmarks like service attitude and turnaround time — such as attending to customers’ mundane requests promptly — could be given greater weightage. Customer feedback in the assessment of their relationship managers could be another criteria — after all, most banks covet customer loyalty.
On the other hand, consumers must be aware of what they are investing in. This could be done through more investor-education programmes. Proactive steps should be taken by financial institutions to work with MoneySense, a national investment education body, to acquaint customers with risk management, instead of just concentrating on product-pushing.
As the adage goes, it takes two to tango. If consumers are befuddled by the complex nature of some financial products, they should seek clarifications, or not invest at all.
After all, stable low returns beat sleepless nights, any day.
The author was a financial consultant for two years.
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10/12 - 10/19
- Breach of the law - arguments
- Speech at Speaker's Corner - 11 Oct 2008
- Fall outside "vulnerable investors"
- Statutory declaration - Glenn Knight
- Lost the sense of bonding and togetherness
- Today: Man with a Mission
- TV news on MAS conference
- Investor meets HSBC Trustee
- Prompt reply to help "lost" investors
- Interview with Zaobao
- Interview with Today Paper
- MAS Media Release on Structured Products
- Meeting at Speaker's Corner 18 Oct, 6-7 pm
- Ray of light and hope
- Act with honour and integrity
- HKMA refers Lehman cases to regulator
- Dow Jones: Hong Kong banks will buy back mini-bond...
- Appeal to Financial Institutions - settle through ...
- A new financial system - back to the safe old days...
- Ponzi Scheme
- Caring and responsible country
- Petition to MAS - review sales training and market...
- HK: Tsang vows to get justice for minibonds invest...
- Petition to investigate the sales training
- Who let the sharks in?
- Fearful about speaking
- MAS International Advisory Panel (IAP)
- Impact of an offer to settle
- Hong Kong Chief Talks Tough on Minibonds - Bravo
- Request for MAS to give an update on the Petition
- Statement by DBS CEO
- Negotiate with financial institutions
- Hong Kong: Minibond fix may prove a risky business...
- New "petition" to collect particulars of investors...
- Jubilee Series 3 LinkEarner Notes
- Facilities at Speaker's Corner
- Strategy Committee for CLS
- Statutory declaration - 2 lawyers
- Statutory declaration - FiDREC
- Take collective legal action now?
- To the victims - be strong
- Caveat emptor: A licence to cheat
- Individual advice
- Specific product or distributor
- Effort to help the victims
- Meeting of High Notes investors
- The Online Citizen
- Ignorance and greed
- Protest outside DBS headquarters
- Leveraging and greed
- DBS will take responsibility, in some cases
- DBS to settle case by case: Rebecca Lee
- Look at the Product Advice
- Sales representatives did not know - misrepresenta...
- Hong Kong Lawmakers Criticize Bks Over Lehman-Back...
- FAQ from investors (1)
- Concern about disorderly behaviour
- Sales representatives should tell the truth and ad...
- HK legislators criticize regulators over bonds
- Credit linked securities were highly risky, even i...
- Low cost investment funds
- Elected President of Singapore
- Hit by Forex Losses
- Dual Currency Deposit (DCD)
- Weekly Speeches at Speaker's Corner
- Tan Kin Lian's speech at Speaker's Corner
- Minibond invetors are not risk takers
- Big loss on dual currency investment
- Forex or dual currency transactions
- SCMP: Banks risked reputations, watchdog says
- Nadya "Speaker" Zagarodnova
- Send this message to your Member of Parliament
- Weekly meetings at Hong Lim Green?
- Why the credit linked notes are highly risky
- Speaker's Corner - 11 October 2008
- Panic of AIA policyholders
- New blog for investors of Credit Linked Securities...
- STI Exchange Traded Fund
- Investing in difficult times
- Speech at Speaker's Corner: 11 Oct 2008
- Channel News Asia - report on Speaker's Corner
- Hong Kong: DBS first bank to repay bonds
- UOB Structured Notes
- Structured products are not sold in the UK
- Blogs for investors
- Volunteers to lead groups of investors
- Fight for the weak
- You have to take the risk and bear the loss
- Upset investors turn up at Speakers' Corner
- Greedy for profits
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