TSB first to disclose true costs of policies

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The Independent Online
THE FIRST high street bank to tell its customers how much its salespeople earn from selling life insurance and pensions policies will be TSB.

It will also tell customers its own expenses on each policy sold.

The bank is to move to the new system at the beginning of November, two months before all banks, building societies and life insurance companies become obliged to tell customers the true cost of life insurance and pensions products.

From November all TSB salespeople will give advice over the entire range of banking and insurance products.

Previously each branch had one salesperson to give advice about life insurance and pensions products while other staff dealt with current accounts, bank loans and overdrafts. The new combined salesforce will be paid mainly by salary rather than commission.

The new structure means all TSB branch managers will become authorised under the Financial Services Act. Each branch will have three or four people authorised to give advice on all of TSB's products. In total the bank will have about 2,900 authorised sales staff against 900 previously.

John Elbourne, retail banking director, said: 'The new structure will probably bring an end to the very highly paid salesman. We are anticipating that about 5 per cent of the sales force will leave. High- earning salesman are not going to be attracted by the new structure.'

He said the maximum salary a salesman would earn would be about pounds 45,000. This compares with pounds 100,000 or more commission remuneration for top-earning salesmen. Mr Elbourne said the part of the staff remuneration that was not a salary would be based on the service the customer received on the entire product range.