Risk and reward

Q. We run a small personal lines brokerage and transact a large amount of private motor business by phone. One of the reasons for our success is the bonus we pay staff for winning new business. I am told we may have to review how we structure our salary and incentives as we may be contravening FSA rules. This seems ridiculous. Surely it is up to us how we motivate staff?

I can understand why you may wish to pay staff in the way you have done, but you now have to be mindful of the Financial Services Authority's rules on Treating Customers Fairly and managing conflicts of interest.

You will have to look very carefully at the reward structure that you have in place, and consider if it could place customers at a disadvantage. For instance, we have seen cases where employees of a brokerage were not disclosing full claims or conviction histories, thus obtaining a