Cold comfort for salesmen Pressure behind a hard sell

Novice sellers should check the small print on their contracts to avoid being disappointed over commissions
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MERLIN MINTER gave up a steady job managing a plumbing supplies store in October 1993 to start a new career as an insurance salesman for Albany Life. He says he was promised training and back-up and pounds 1,000 a month for three months, by which time he would be earning substantially more than that in commission and would no longer need support.

He spent his first month with the Albany Life trainer learning about pension plans, life assurance and endowment policies and regular savings schemes before going out on the road.

Sadly, the failure rate for salesmen is even higher than for jobbing builders. It was the wrong time of year for Mr Minter. The clients he contacted were either saving up for Christmas, busy enjoying it, paying off debts after the event or pulling in their horns after the New Year sales.

Nor did it help that he did not receive the leads he was expecting. Apart from setting up a stand in a store in Crawley where the public was invited to take part in a raffle which produced names and addresses to contact, most of Mr Minter's work was "cold calling", trying to sell policies to people who did not actually want to be contacted.

Successful sales were few and far between. Anyway he was entitled to only 60 per cent of the full commission earnings on the first pounds 3,000 of business as a way of "paying" for his training. By February he was desperate. His home was at risk; he called it a day after earning just a few hundred pounds in commission, and went off to look for regular work again.

Many would-be salesmen have a redundancy package from a previous job. Unfortunately, Mr Minter did not start off with the financial cushion necessary to support his wife Kim and family. When he asked for his first pounds 1,000, he was offered a cheque and a contract to sign, which subsequently made it clear that it was only a loan, against his future commission earnings, and anyway the small print said he could not owe the company more than pounds 1,000, which meant he never qualified for a second payment.

When he left, Albany wanted the unearned balance of its loan back again. Mr Minter did not have it. He set out to sue Albany for the monthly support, but they counter-sued for the unearned balance of their loan.

This is a cautionary tale for all inexperienced salesmen. Always make sure what you are letting yourself in for. But what worries Mr Minter more than his own experience is the pressure put on salesmen desperate for commission to sell policies which may not be either the cheapest or the most suitable products for the customer. Commissions range from a few pounds to perhaps a couple of thousand if they can persuade someone to transfer a substantial pension fund. If the public knew how much the salesmen need that money they would would be doubly on their guard.

There is nothing in this cautionary tale to suggest that Albany Life was any worse than any other direct sales specialist, and in the past two years the industry has moved to improve training and lessen salesmen's reliance on commission.

Albany themselves now require all salesmen to be supervised when they call or phone clients during their first six months and to refer all the investments they recommend to a supervisor. Since 1 July this year they have guaranteed trainees pounds 1,000 a month for up to a year, which is not recoverable.

But some insurance groups do still pay commission only, and no one should doubt that the pressure on salesmen to succeed is still extremely strong.

Unsuccessful salesmen soon find out to their cost that if they fail to meet their targets, their jobs as well as their earnings are put at risk.