'Fresh Concerns' Over Staff TargetsAug 28, 2017
Most lenders in the UK claim to have abolished sales targets amid mis-selling scandals, including for payment protection insurance (PPI). However, the Financial Times has reported today that staff may still be under pressure to meet specific targets.
The article reads:
Lloyds staff raise fresh concerns about sales pressure
“Staff at Lloyds Bank have raised concerns to managers that they are still under pressure to meet specific mortgage-related goals to boost lending despite the bank claiming to have abolished targets.
In an internal note sent to staff at the retail bank and seen by the Financial Times, Lloyds’ mortgage director Mike Songer said some mortgage and insurance advisers had recently voiced concern that they were being “managed” to specific targets.
He told staff in his note that the bank did not have a set quota for customer interviews and sales, as the number of people branch advisers met on a weekly basis was “going to ebb and flow”.
“It won’t be the same number week in week out because that is not how customers are; that’s not how our branches are,” he said.
However he added: “Having said that, you all know that restoring Lloyds mortgage market share is one of our five key priorities and that is unchanged.”
Lloyds Bank is part of the Lloyds Banking Group, the largest mortgage lender in the UK. The group, which also comprises Halifax and other brands, has reported that its overall share of the market declined by about 1 percentage point to 20 per cent in the year to September, due to increasing competition in the low interest rate environment. The group does not disclose market share information for its individual brands.
António Horta-Osório, chief executive of Lloyds Banking Group, has focused on preserving margins over the past two years instead of increasing sales, as rival lenders have slashed borrowing costs. The bank has expanded higher-margin lending, such as motor finance.
Mr Songer’s comments come weeks after sales pressure at banks was thrust back into the spotlight following revelations that Wells Fargo, the US bank, signed up as many as 2m customers for accounts and credit cards without their knowledge.
Banks in the UK claim to have dropped sales targets over the past few years following a series of mis-selling scandals, including payment protection insurance, and subsequent fines from regulators.
Lloyds Banking Group said: “Lloyds Banking Group’s branch network (this includes Lloyds Bank, Halifax and Bank of Scotland) does not have sales, or activity, targets at a branch or colleague level in relation to mortgages or any other product, nor is a colleague’s pay or bonus linked to product sales.”
Mark Brown, of the Lloyds Trade Union, which is no longer recognised by the bank, said that Lloyds has in the past set out targets for mortgage interviews and sales, which involved holding 13 customer meetings a week. Of these, three should turn into mortgage sales and three general insurance sales, he said.
One Lloyds insider said there might be some instances where this “old language” is still being used, as cultural change “cannot happen overnight”.
Mr Brown said: “The bank’s managing director of mortgages has said that he doesn’t want bank-wide targets for mortgage advisers, but he’s happy for them to have individual targets.
“The whole point of moving away from sales targets was they drive behaviours which are not in the best interest of customers. We understand the bank is desperate to reverse the decline in its mortgage business but abandoning its commitment to a ‘world without target’ is a step backwards and should be reversed immediately.”
The LTU has flagged up the issue to the Financial Conduct Authority.”