T&C using expertise to get Certification right – Do you need it and what should you look for?



How can the word expertise be used in connection with the Certification Regime when the first deadline, (March 7th 2017), for certifying staff has not even been reached – are there any experts?

Sounds like a good topic for a debate doesn’t it? You will be pleased to know that I’m not planning my own one woman debate on this. However I do plan to raise a few questions, questions I believe firms should be asking themselves prior to engaging ‘expertise’ and whilst working with the ‘expertise’.

Some of you will be thinking she’s a bit late, we are already in the throes of actioning the Certification Regime requirements, or we don’t need expertise as we’ve got it sussed, or this isn’t going to affect us until 2018. If you know what you are doing and are sure you have it all buttoned down, that’s great, no need to read on… let’s face it if you don’t hold the Prescribed Responsibility for the firms’ performance of its obligations under the employee certification regime – what’s the worst that can happen?

You may want to revisit conduct rule 2, (You must act with due skill, care and diligence), before you continue.

For those of you who are not affected by this until 2018, ask anyone involved in the Senior Managers Regime in banks, building societies and designated investment firms how quickly the time goes.

Does age and time spent in financial services count as expertise?
I have trouble remembering a time when I wasn’t involved one way or another with T & C and regulated supervision, but just because I’m getting on a bit and have spent all of my working life in financial services, does it make me an expert?

Expert means somebody with a great deal of knowledge, experience, skill or training in a particular field or activity. A lot of firms will choose to go with the bigger players when they require expertise as they believe this to be the safest option, and who’s to say they are wrong?

Whatever size firms you engage for their expertise make sure to ask the following questions…

  • Who will be working on this on a day to day basis?
  • What knowledge, skill, training and experience do they have in this area?
  • Who will be overseeing this work?
  • How often will we see the person overseeing the work?
  • Will we have to pay every time we have a meeting with a Partner/Senior Associate?

Look at what in-house expertise you have
Most of you who have worked in regulated supervision with Financial Advisers and Investment Managers will know what assessing competence involves. The Retail Distribution Review, RDR, clarified the need for knowledge and application by ‘upping the ante’ on qualifications and the need to complete 35 hours of CPD, 21 being structured. We know accredited bodies will not issue a Statement of Professional Standing (SPS) unless the individual has the minimum level 4 qualifications and has completed the required CPD. It goes without saying certification will be the forerunner for the SPS, if SPS’s remain.

If you are ensuring your people have the right qualifications to do their role, have completed the necessary CPD hours and are assessing their competence in applying their skills and knowledge, is that enough?

File checks alone are not robust
Having undertaken more observations than I care to remember as a supervisor, area manager, consultant and now partner, if your assessment of competence does not involve an observation for all regulated face to face roles, I would question the overall competence of that individual.

File checks alone do not demonstrate that an individual has asked the right questions, elicited the information required and recorded it correctly. It only shows what the individual has written in the files.  How many clients check the information that is sent to them?

Observation assessment can be heavy on resource, but can you take the risk not to take the holistic approach?

The outcome may be far more expensive especially for the individual who holds that Prescribed responsibility for F&P.

Identify what you want the expertise to do
If you know what good and robust looks like, work out where your gaps are.

don’t assume because managers have been undertaking appraisals for years that they are competent at assessing competence

It’s easy if your certificated individuals are like those mentioned above providing investment advice, and the same can be applied for mortgage advisers, but what about the more niche roles or roles that have not required competence assessment before?

Do all of your certified roles have a job description?

Do all of the certified roles have a set of competence standards aligned to their job description?

Is competence reflected in the appraisal process – i.e. if an individual is less than competent or more than competent, does it impact on their end of year assessment for performance rating and/or bonus?  

I’m not suggesting your competence assessment should be onerous, but it should be robust. If anyone suggests a light touch approach is acceptable, check whether their neck is on the line.

Do your line supervisors/managers know how to assess competence?

There is an art and a process to assessing competence – don’t assume because managers have been undertaking appraisals for years that they are competent at assessing competence. Our experience shows the ‘finger in the air’ approach is still widely exercised.

Should you need it, a good firm providing expertise or resource to address your requirements will work with you to identify where your gaps are and provide the right level of support and guidance.

Weigh up the pros and cons of using external expertise/resource to employing someone to be a T & C supervisor/manager.
Good T & C Managers who are not already employed or work on a consultancy basis are like good compliance people, ‘as rare as hens’ teeth’.

If you identify where you need the expertise, it may be cheaper to use external resource as the requirement is not there all the time – you only pay for what you use.

Can a supervisor look after their own clients/do their own job (other than supervision) and assess individuals’ competence to the level the regulator is looking for?

Once again our experience tells us it is extremely difficult and remuneration plays a large part – if they are remunerated for looking after their clients, and not as a supervisor, guess where they will spend their time?

The regulator will not only be looking at whether the people assessing have the skill set, but whether they have the capacity to do it to the level they find acceptable.

You can’t beat good record keeping
Certification requires good easy record keeping. You may already have an automated system or looking at purchasing one to support the Senior Managers Regime and Certification in particular.  There are some very good systems out there but which ever one you use, an initial and maintaining competence sign off facility/documentation and the ability to record CPD is crucial.

I’m a big advocate of that horrible term blended learning which has a direct correlation to blended CPD, so if the record keeping system also provides eLearning or can be linked to systems that do then that’s even better – if you don’t know, ask the question of your provider or potential provider. The time saved in manual recording will pay for itself or expertise you may require in another area.

I will leave you with a couple of final rhetorical questions:

If you are in the position of having engaged external certification expertise which have completed the work they were engaged to do, did they help you stand on your own two feet as much as possible or will they return next year or 6 months’ time to repeat the work or to do even more?

If your certification model supports that i.e. you do not have the internal resource, then that may be absolutely the correct outcome but if you have the internal resource …

Having completed the work does your expertise charge for answering questions they should of upskilled someone in the business to answer?

Good external expertise will help a firm stand on its own two feet as much as possible after it has completed the work it has been engaged to do. The sign of good external expertise is sharing their knowledge, skill and experience to put their client in a better place than they were before they engaged them, not an expensive support crutch.


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Business Development Partner Financial Services Training Partnership

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