How should Fullerton design its incentive structure for field agents who source

personal loans?

Banking and insurance are the only business sectors in which qualitative bonuses will be making
up a greater and greater part of variable pay schemes.

This will require, for example, sales agents to possess sufficient knowledge of their clients, and
to ensure that their profile information is accurate and that their appetite for risk has been
correctly evaluated. They must be capable of evaluating their clients’ needs, and offering
products that suit these needs.

Not only will the calculation of variable pay schemes be in conflict with the client’s interests, but
in addition the transparency obligation in the IDD directive requires that sales agents explain to
their clients how they are paid. Of course, this does not mean revealing the amounts involved,
but rather explaining how their salary is calculated.

A qualitative target bonus enables firms to augment their commercial performance by

establishing check points that will allow managers to assess their employees’ quality
performance. The primary objective is to encourage the sales agent to follow a path that will lead
towards improved performance.

Seek advice from our experts in variable pay and benefit from assistance in the implementation
of your variable pay scheme, while taking into account issues which are specific to your sector.

Giving out bonuses to talented field agents that bring back the most personal loans
are essential to keep them motivated. However, the most prominent method that
Fullerton should implement is the phasing out commission, as it is the newest trend
within variable pay scheme, to its field agents who source personal loans. This type of
compensation awarded to the sales advisor that should not damage the commercial
relations with the client. It is crucial for the client to make their choice with full
knowledge of what they’re purchasing. Field agents need to be able to offer
customers a product or service that meets their specific needs while respecting their
risk liability and their investment horizon. As a result, the bank could avoid un-
necessary write-offs in the consumer and commercial loan market with high credit
risk.