Make T&C relevant


The FCA is keen to ensure that advisers are qualified to enable them to give good quality advice and that their level of competence is maintained to a high standard. The Continuing Professional Development (CPD) has become a major part of an adviser’s life.

The standards of CPD – an adviser must undertake 35 hours per year of relevant training, of which 21 hours must be structured training.  CPD structured / active learning involves interactive and participation-based study. It is typically proactive and can include attending a training course, conference, workshop, seminar, lecture, e-learning course or CPD certified event.

The main issue is that any training is relevant and useful to the adviser, rather than simply attended to make up the hours in a year.

The final counting up of the hours of CPD is normally undertaken as part of the application for the Statement of Professional Standing that is needed by all advisers to enable them to continue to practice.

A Training and Competence scheme is made up of many elements that are designed to enable the adviser to keep up the quality of the adviser. The T&C scheme needs to be evidenced to prove that the adviser has actually experienced the training. Methods of counting are as follows:

  • One to One meetings
  • Key Performance Indicators
  • Observed meetings
  • File checks
  • Formal exams

The formal exams are one off training, in that, once the exams are passed, the training is not repeated. Obviously, there is a whole schedule of exams that lead to various levels of qualification. So for many years, the whole amount of structured CPD can be obtained by sitting exams on a regular basis.

All of the other items are CPD. However, we should look at how we can make each of these elements genuinely useful to the advisers. After all, it is their scheme.

What is most important is that any training undertaken is documented. Often the actual training undertaken is much less important than the feedback that the adviser receives and any resulting remedial action.

One of my client firms undertakes training every morning for around 30 minutes and sometimes much longer. The director meets each of the advisers for detailed meetings about their business two or three times per week. Wonderful supervision, but unfortunately none of it is documented.

Most firms hold formal one to one meetings one or two times per year. These meetings are to discuss all the elements of the adviser’s business, types of business, business levels and other issues that make up elements of the adviser’s business. This should be a good opportunity for the adviser and the supervisor to take a snap shot of the adviser’s business and to motivate the adviser towards his business in the following time.

The information used for these meetings is often the collection of information, which makes up Key Performance Indicators. Various supervisory companies provide templates for key performance indicators, which would often include:

  • Business levels.
  • Types and breakdown of business & products.
  • Breakdown of providers used for different products.
  • Clawback rates
  • Persistency rates
  • Results from file checks.
  • Results from observations.

A whole range of statistical information is available. Many advisers use the forms provided by compliance specialist firms in their entirety without considering whether all of the information collected is relevant to the advisers.

File checking is undertaken within all adviser firms. File checking can be undertaken both pre and post-sale. Most file checking is undertaken post-sale. This is interesting, in that, if something major is uncovered, it may not be possible to reverse the initial advice.

Many firms have a regime of pre-approval for complex business.  Pre-Approval of complex business makes good business sense as it should raise challenges from the supervisor to ensure that the advice is sound.

Post-sale checking is undertaken by all firms. Most firms want 100% checking of the business of inexperienced advisers and complex business. Then many firms reduce the checks to 10% of the adviser’s business. The feedback given can range to simple pass or fail grading through to passing with feedback or giving various reasons for failing a case. Some firms are very strict about needing certain information and paperwork being on file. I have seen some very restrictive practices where overly strict expectations of a compliance file checker actually stopping business being completed.

I use file checking as a method of training advisers. I tend to pass cases with feedback if the short-comings of the file make no difference to the advice given. If the case has a genuine problem that makes the advice unclear or even questionable then it needs to be returned to the adviser for them to put matters right.

It should be remembered that the FCA classifies cases as suitable, unclear or unsuitable. The FOS however only grades as suitable or unsuitable.

Observations are probably the least popular part of our CPD program. Most advisers do not like being observed and often find it patronising. It is difficult for the adviser to be seen as a trainee in the eyes of a client. Clients may also feel nervous about having a witness in their confidential meeting. It is hard to convince them it is for their protection without raising further doubts in their minds.

So this then runs onto the option of doing observations as role plays. I cannot think of any adviser that I have ever known who enjoys role plays or considers them other than an unrealistic waste of time.

An adviser firm in Devon asked me to run a series of role plays for their 10 experienced advisers. One of the issues that came up was that I am based in Brighton so I would need to go to them to undertake the role plays. Since they wanted first meetings and presentation meetings for each adviser, this would mean 20 meetings. This would be an intensive set of meetings over 2 or 3 days. So we worked out a more efficient way of undertaking these meetings.

I was determined that they would not do the traditional nonsense of presenting their business card to Mr Client and producing illustrations for non-existent business. So we decided to work with live clients.

Each adviser called me on my mobile to introduce themselves and tell me which client and the type of business that was being considered. We then made an appointment time and date for a Skype call.

At the first appointment, we discussed the sort of things that they would say to a client when presenting the business card. Which points they tend to lead on from their IDD. Then we discussed how they undertook their fact find, which parts they found more difficult to complete with clients. We then covered how they approached the attitude to risk questionnaires. The advisers found this approach useful as it made them think about various elements of the process and to review how effective they were in different aspects of fact finding.

The main thing about any Training & Competence scheme is that it should provide an opportunity for advisers to improve and maintain high standards of advice to all their clients

We then made an appointment for the second meeting.  Between meetings I was able to look at the client fact find that had been completed. In some cases, I would have queries about discrepancies in figures and information. I was also able to look at the information backing up the fact find, ceding scheme information, banks statements etc.

We started the second meeting discussing the fact find, which had the effect of summarising form the first meeting. We then went through the recommendations being made. At this point, some of the advisers took the opportunity to bounce ideas about the different options that were available and the most effective route forward for the client.

Then we moved through to the end of the meeting on the assumption that application forms and other paperwork had been completed for them to confirm the next steps and setting up the arrangements made.

So the observation was undertaken without patronising the advisers. They experienced a thought provoking review of their process. It gave some of them the opportunity to actually talk through their live cases to direct them how to proceed.

The main thing about any Training & Competence scheme is that it should provide an opportunity for advisers to improve and maintain high standards of advice to all their clients. This can only be achieved by ensuring that the training is useful to them and offers them a real learning experience.

It is important to record any training undertaken and there are various sites available for advisers to keep their records. These will often provide templates to records various activities. The most important box in any of these is the one that allows the adviser to review what they have gained from their activity. No activity should be undertaken unless it provides a genuine opportunity for the adviser to learn something relevant to their work to enhance the quality of advice that they will provide for their clients.



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TC Compliance Services Tony Catt is a freelance compliance consultant working with several firms of different sizes. "I have previously been an adviser, which gives me a good understanding of the advice process and dealing with customers and I enjoy a close relationship with my adviser clients"

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