Sales – MI and actions
(Outcomes 2, 3, 4 and 5)

Data measured (MI)

What this MI shows

Target

(Set by your firm. Should be what your firm believes will demonstrate TCF in relation to the six consumer outcomes)

Result

Actions

(Where target not met indicate how root cause will be investigated and recommended timescales for remedial action)

Sales volume by product type (add risk rating for each product?)

Product suitability – excessive sales of one product may indicate mis-selling/unsuitable sales including inadequate assessment of affordability.

Sales volume by commission rate/type (mortgage and insurance products)

Commission rate payable on a particular product may result in product bias, leading to mis-selling/unsuitable sales. As above, may mean affordability wasn’t properly assesssed.

Sale volumes of extended tie-in

Excessive sales may indicate customers aren’t being sold the most suitable product - may include inadequate assessment of affordability.

Sale volumes of Self Cert (measured against expected targets)

Higher than expected volumes of Self Cert sales could indicate mis-selling, resulting in some customers (who can prove their income) paying an excessively high interest rate. May have implications for affordability.

Sales volumes of PPI

Excessive penetration rates may indicate mis-selling/unsuitable sales.

Sales volume against expectations

Poor sales may indicate wrong targeting or product too complex; excess sales may indicate mis-selling/unsuitable sales, including affordability concerns.

Offer to completion rate

A high drop off rate between offer and completion may indicate unsuitable sales.

Offer to completion time

Very short completion times may indicate the customer has had inadequate time to consider the terms of the offer and/or has been pressured into accepting a product they do not fully understand

Cancellation within cooling off period (insurance products)

High cancellation rates may indicate unsuitable advice and/or a misunderstanding of the product by the customer.

Early redemption rates on limited period products

Excessive early redemption rates may indicate a lack of suitability of advice as customer believes product is unsuitable or can’t afford it and terminates early

Percentage of file check fails – total and by adviser (based on a sample of files)

By firm/adviser - evidence of systemic weaknesses and/or breaches of the Conduct of Business regulatory requirements (including disclosure) which may result in misleading or insufficient information being given and/or mis-selling. By adviser – may evidence T&C shortcomings and training needs.

Number of new products introduced during a given period

Review in conjunction with product training statistics (see below)

Percentage of sales staff completing new product training within a given period

Training and competency of advisers is a key component in ensuring that customers are treated fairly. Poor product knowledge may lead to an inappropriate recommendation.

Corrective/preventative action that could be taken where MI indicates a risk of unsuitable sales

Check Fact Find for completeness. Do the questions allow the broker properly to assess suitability and affordability? See our Fact Find checklist and Product suitability checklist

Carry out file checks – is the Fact Find being fully completed? If not consider imposing penalties or commission withdrawal and disallow independent sales until re-training is complete. For ideas on how to use the MI to change sales behaviour read our Remuneration/incentives case example and Product suitability case example.