Following the FCA’s announcement in December 2026 of the removal of minimum annual CPD requirement, many firms are reassessing what training and competence should look like in practice. This article explores the potential impact on approaches to T&C, and how CPD can be used to drive competence, value and better outcomes in 2026 and beyond.
CPD: Sacrificed for Simplification?
Prior to the FCA consultation CP25/12, ‘Simplifying the Insurance Rules’, individuals involved in insurance distribution were required to complete an annual minimum of 15 hours of CPD. This requirement originated from the EU Insurance Distribution Directive which also set out eight core knowledge areas staff were expected to have a minimum necessary knowledge of, proportionate to their role.
In December 2026, the FCA confirmed in PS25/21 that minimum CPD requirements, and associated monitoring and record keeping expectations, would be removed and the eight core knowledge areas would become guidance-only.
Without this awareness, systems and processes may unintentionally create friction or risk of harm, even if the individual does not view themselves as part of the distribution chain.
The regulator’s aim was to reduce the regulatory burden on firms and offer greater flexibility and proportionality in how they manage training and competence. The change also aligns with FCA’s wider pledge to simplify regulation, partly driven by the UK government and linked to its secondary objective of supporting the growth and competitiveness of the UK economy.
So, what has really changed?
In regulatory terms, little has changed. Firms are still required to ensure staff are competent to perform their roles effectively- obligations which are embedded in SYSC 28 of the FCA Handbook- and training remains fundamental to achieving this.
However, the removal of the 15-hour benchmark may present a challenge for firms that previously relied on it as a tick-box proxy for competence, with little assessment of the efficacy or relevance of the learning. Firms must reconsider how they will evidence competence to both the regulator and consumers, not just by demonstrating that training has taken place, but that it is purposeful, targeted and linked to outcomes.
Completing 15 hours of CPD never guaranteed competence. Its removal, therefore, creates an opportunity for firms to reassess how learning and development is used to improve skills, knowledge and deliver better customer outcomes. For some, this may require a broader shift in mindset and culture.
A Changing Regulatory Approach
The FCA’s decision aligns with its wider shift to outcomes-based regulation, which expects firms to focus less on procedural compliance and more on whether their actions and genuinely deliver good consumer outcomes.
Outcomes based regulation has historically been challenging to implement. This was apparent in the 2024 ‘Insurance multi-firm review of outcomes monitoring under the Consumer Duty’, in which the regulator found many firms focused on monitoring process completion rather than customer outcomes, reporting metrics “with limited, or no insight into key findings of the process or any learnings or actions to be taken” to deliver good outcomes.
The same pattern can be seen in many firms’ approaches to CPD; the 15-hour requirement is used as a tick-box exercise, with little assessment of whether the learning addressed real risks, improved performance or reduced harm. FCA enforcement data reflects this; 45% of Final Notices in 2021 criticised firms’ over-reliance on generic, one-size-fits-all programmes, the success of which was judged solely on completion.
Nisha Arora previously remarked, the Consumer Duty is not “once and done”. The same is true of learning and development; it is not 15 hours and done, nor should it be a repetitive or empty exercise. To align with the ethos of the Duty, training must be measured, targeted and responsive to the evolving needs of firms and consumers.
Using CPD effectively: connecting training, competence and value
A joined-up approach is key to ensuring learning delivers real benefits. One way to conceptualise this is to view training, competence and value as interconnected elements that build an effective training and competence framework.
When training is relevant to an individual’s role, aligned to the firm’s products, customer base and market segments it builds competence. Competent staff, in turn, deliver value for both the firm and its consumers.
This also works in reverse. Analysis of outcomes and performance can highlight where value is being lost or reduced. Complaints, audit findings, and or vulnerability metrics can all reveal gaps in skills or knowledge. These insights can then inform targeted training to address root causes of issues and improve outcomes.
For example, a software developer working within an insurance firm may not require detailed product knowledge but must understand consumer needs and Consumer Duty expectations when designing digital journeys. Without this awareness, systems and processes may unintentionally create friction or risk of harm, even if the individual does not view themselves as part of the distribution chain.
Similarly, an increase in complaints relating to an individual or team may indicate declining value for consumers. This data can then inform targeted training interventions that improve individual performance, strengthen customer experience and reduce future risk.
A joined-up approach, therefore, creates a clear link between individual roles and wider firm objectives and obligations to ensure training directly supports delivery of good outcomes and fair value.
Case Study: Insight into Action
A practical example of this approach can be seen in work undertaken with a firm supported by the compliance arm of UKGI Group. The firm believed it was managing vulnerability effectively, having identified very few vulnerable customers within its client base.
A compliance consultant recommended training staff on recognising vulnerability. Following the training, the number of vulnerable customers identified nearly doubled. Vulnerability had always existed; staff were simply not equipped to recognise it.
In this case, reviewing outcome data exposed a clear training gap. Addressing it improved staff competence and delivered tangible value. Management information became more accurate, insight into the customer base improved, and staff were better equipped to support customers and reduce the risk of harm.
Aligning T&C with existing processes and data
Many firms cite time, data and resource constraints as barriers to effective training. However, much of the necessary information already exists. Complaints data, audits, quality assurance findings and vulnerability metrics can all be repurposed to inform training and competence programmes.
The FCA already expects firms to monitor outcomes, identify emerging risks and demonstrate how they have acted on this information, for example through annual Consumer Duty board reports. Training can form a powerful part of that response, providing evidence that issues have been identified and addressed through meaningful action.
Conclusion
The removal of the minimum CPD requirement should not be viewed as a relaxation of standards, but an opportunity to rethink how firms’ training and competence can be used to genuinely support better outcomes.
Firms that adopt a purposeful, outcomes focused approach to CPD will be better placed to demonstrate competence, deliver fair value and meet regulatory expectations. In doing so, CPD becomes more than a regulatory obligation, but a strategic tool for building capability, trust and long-term value.
