Rewards at Work

Suppose a stock brokerage rewards in-house sales with trips, offering double credits and five-day "due diligence trips" to European and U.S. resort towns for brokers with more than $500,000 in production in a particular fund. The firm currently owns 20 percent of the fund group, and its ownership stake apparently grows with increased sales. Although the firm has a policy against sales contests on mutual funds, and in the past, reps were unable to accept trips from other funds because of a strict interpretation of NASD rules, the firm says these are not sales contests and the trips are "informational and related to due-diligence." Apparently, reps are not being forced to sell the fund. "No pressure to do more or less," says one of the firm's brokers. However, the firm says, "participants do need to qualify (for the trips) by doing business with a particular product and expressing an interest in doing more." The firm considers the trips "advanced training." What are the ethical issues?