CONCERNS about how structured products offered by banks were sold by relationshipmanagers (RMs) are based on more than questions about RMs' code of ethics.

The root of the problem lies in the fact that most, if not all, banks set monthly sales targets for RMs, especially for the sale of newly-launched products.

Before the RM can fully understand the risk level of the product, they are usually pressured to meet their banks' sales targets.

Some time ago, I was offered the position of an RM.

I realised that when the bank imposes monthly or quarterly targets on the sales of a newly- launched product, the RM will not be able to fully put his clients' interest first.

An RM's main concern would be how to make presentations to enough people so that he will be able to hit his sales target at the end of the month.

By the time a problem crops up, he would either have been promoted or moved on to work in another bank.

This is unlike a financial adviser (FA), whom the client will call or look to when an issue arises.

As a result, the FA himself is likely to handle the problem, and will be the 'unfortunate' one to clear up the mess.

Having been an FA for the past decade, I felt the pressure to meet sales targets as an RM was a 'time bomb'.

Hence, I turned down the offer of the RM position.

I remained in my current position as an FA, where I am free to sell any financial product to clients that they want.

There is no reason why I should promote one over the other in my current position.

If banks continues to impose sales target on RMs, resulting in their aggressively promoting newly-launched products, this will create more 'time bombs' waiting to explode, and in future, clients might point fingers at RMs, complaining that the products they bought were not what they wanted.

Mr Charles Lim

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