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We’ve all suddenly thought of extra things to buy at the supermarket while at the supermarket. They are designed that way – everything from the colours, lighting and smells to the layout and positioning of products. We know it, expect it and accept it.

They aren’t the only ones. Ever go into a bank branch for something (who does that these days?) and come out with an unplanned new KiwiSaver account, credit card application or insurance policy?

I’ve often said that starting my career in banking was very useful because it taught me how they think. Why they do what they do and say to customers. I worked a variety of roles for two major banks in Levin, Wellington and Palmerston North. In the mid 90s banks understood how hard it was to hold onto your money, and even made some great ad campaigns about it. Since then they have become a little too focussed on getting more of it for themselves.

The Tag-On

When working the teller’s counter part of my job was to ‘tag-on’ products to customers. You’d come in to cash or bank a cheque, or deposit the day’s takings and I HAD to tell you about the product of the day, such as travel insurance, our credit cards or term deposit specials. You got a sales pitch whether you wanted it or not – even if you were a regular who had been in the branch already that week.


We had targets. The system was a mix of small rewards and KPIs that basically meant the target was the minimum to avoid ‘performance management’ (a “training programme” designed to get you up to the required standard) which was the first step of a protracted disciplinary process that either “corrected” your sales, or put you on a path out the back door.

Of course, regularly hitting targets simply meant the next quarter or year they reset to zero, and the new target was bigger. The pressure to sell was intense, exhausting and powerfully de-motivating.

This culture of sell, sell, then sell some more has pervaded retail banking to the point that our regulators are now focusing on what they call ‘Conduct and Culture’. They have found that tactics and ‘incentives’ around sales in large institutions have lead to inappropriate product sales. It affects everything from credit cards to insurances and some really poor practices around selling KiwiSaver.

What do the regulators say? “Incentives that are highly sales focused means that the risk of inappropriate sales practices occurring is high. It is therefore unsurprising that we were told by some salespeople of inappropriate sales practices taking place”. – FMA ‘Bank Incentive Structures’ – November 2018

In a massive investigation in 2016 the Financial Markets Authority found there are approximately 8,200 AFAs and RFAs in New Zealand. Of these, about 4,500 do not have any active life insurance policies on their books. Another 3,700 have at least one active policy and were therefore included in the review.

Of those 3,700 there were around 1,100 who are very active. Of those there were 200 ‘high volume’ advisers who were potentially issuing large quantities of ‘replacement’ life policies.

Of those 200, 24 were investigated in depth.

Of those 24, 11 had action taken against them. – figures from FMA ‘Replacing life insurance – who benefits?’ June 2016

Clearly, advisers are not the major risk of consumer harm. Most advisers care deeply about their customers and want to make sure they are better off. I started my business to get full control over what I say and do with clients. I know how the market works, and understand the moving parts. MoneyTree was built to take agencies with all the major providers and with no allegiances or sweetheart deals with any of them. My disclsoure documents exceed the requirements of current legislation and I have never taken a sales volume based overseas trip. It’s quite simple: my clients interests come first.

If it’s been a while since we caught up please get in touch.


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