Jack Mizel is the CEO of the Institute of Sales Management- the trade body for the sales industry – www.ismprofessional.com
The blight of misselling is one that has plagued the financial services sector for many years, with significant damage to both reputation and bottom line. But the vast majority was utterly avoidable, had a bit more thought gone into the business model.
Financial instruments, of whatever hue, need to be sold; this needs to be done in an ethical and professional framework where sales people are given the skills they need to do their job properly.
For starters, companies need to recruit the right calibre of staff: professional, ethical, conscientious diligent and with a desire to be successful. There are lots of assessments and psychometric tests that can act as the first stage filtration and we advise you to put your staff through that. That, in conjunction with the ‘sense and feel’ of the people you may be working with, will determine if the candidate has the right qualities to fit as part of the team.
But, with the exception of outstandingly experienced staff, these recruits have to be viewed as raw material to be nurtured and developed. You need a framework of training and continuing professional development (CPD) that envelopes those people and shows them that they have a career path and that they are valued as much as others, such as analysts, accountants, marketing and so forth, within the organisation.It costs time and money to recruit staff but firms need to invest in them properly too. Otherwise churn rates go up. These people are expensive to replace and waste management time too.
The ISM exists to provide – though its approved training partners – a framework where that development can take place as we’re the only organisation of this type in the world that has approved qualifications. Members are put through a vigorous assessment programme – that examines their strengths and weaknesses – and a bespoke training programme is then created.
However, this isn’t just about training and qualifications. We know that training – in isolation – doesn’t work. It needs to be part of a much wider piece of CPD. Not only does this require buy-in from management, but the sales person needs to be proactive, read great sales literature, attend meetings and be mentored (or act as a mentee if they are at higher levels). Without that, the lessons of training fade after only a few months.
There is a second benefit to this and that is that its customers and buyers know they are in safe and reliable hands. Investment in staff can only build trust and reputation, so that you not only have the best people, but they are performing to the highest possible standards. This applies not only to companies who have had their image tarnished by misselling in recent years, but all banks and financial institutions.
Sadly, sales staff is often not given the necessary training or development. Instead, they are given unreasonable targets by management and told to “hit these numbers, make X numbers of calls and don’t worry about anything otherwise you’ll be fired”. It is small wonder that, in such environment, employees will end up doing things they really shouldn’t.
The consequences of this can be enormous. In December last year Deutsche Bank and Credit Suisse agreed a combined £9.8bn deal with the US Department of Justice over residential mortgage backed securities (RMBS) misselling. RBS is braced for multi-billion-pound settlement over similar accusations. And that’s just in the past few weeks, before that we had PPI, Libor, securities; the list goes on and on. And all this was avoidable, had staff been given the right training.
As Sir Winfried Bischoff, Chairman of the Financial Reporting Council accurately said last year, “Rules and sanctions clearly have their place, but will not, on their own, deliver productive behaviours over the long-term.
Done properly, employees should still be able to do their job effectively without the CPD taking them off the radar for any great lengths of time. Training should be offered via a learning platform so that, apart from external meetings, everything is available at their place of work. There is also a code of conducts staff should adhere to that provides a broad set of principles for the conduct of professional activity.
The ISM established its own code (which you can find here) to infuse into our members a foundation of ethical and professional conduct that they can build on, so that they achieve a high standard of professional practice and to protect both the interests of their clients and the interests of the Institute.
Companies need to not just look at targets, but what the next target (and the one after that) will be. By investing in their staff, and thinking over the long term, then great things can be achieved. If companies are genuinely serious about increasing performance, then allowing staff a few hours a month of CPD is something that will give a return many times over.
Not only will this reinforce professionalism within the sector which, by its very nature, will massively reduce miselling and malpractice, but it will make staff feel valued. Sales staff are the keystone to almost every business, so if you’re getting the best out of your team, the entire company benefits. That’s a good return on investment in anyone’s book.