Author: Ruleguard – ruleguard.com

One of the fundamental obligations applicable to all regulated firms is the need to implement appropriate processes to manage risks.  One such risk is that of providing unsuitable advice to consumers. This area has been a regulatory hot topic for some time.

Remember the Retail Distribution Review (RDR)?  Compliance and HR teams will recall with the moans from business as staff struggled to embrace the new CPD requirements.

RDR introduced CPD requirements from 2013.  It required specific roles such as the Retail Investment Advisers (RIAs) to complete 35 hours of CPD (of which 21 hours had to be structured).  The objective to raise the competence bar for these high risk roles.

In addition, individuals must also hold a Statement of Professional Standings (SPS) from a FCA accredited body.  The SPS is issued annually and confirms an individual has the required qualification.  It also confirms that the individual continues to meet the minimum competence obligations, include required CPD hours and is meeting the APER or COCON obligations.

What qualifies as CPD?

Each professional body issues guidance to firms and their members regarding what structured content is and issues its own CPD for members to complete.  This may take the form of internal briefing sessions or external training course, podcasts etc.

However, for the training to qualify as structured CPD, a minimum 30 minute duration was put in place.  Additional requirements were implemented in October 2020 for Pension Transfer Specialists.

What’s changed?

In April 2022, the FCA proposed amendments to the requirements set out in the Training and Competence sourcebook (TC 2.1.20G/TC2.1.23AR91) and TC 2.1.23AR(2)(a).

Following a 5-week consultation period, the proposals were implemented in May 2022 with the TC sourcebook updated.

So how does affect HR and Compliance?

Firms affected will have a Training and Competence framework within the businesses.  HR and compliance teams should review their policies and procedures.  Should they consider removing the 30 minute requirement from their own frameworks?

Whilst the regulator has afforded advisers greater flexibility, firms have a duty to ensure that the advisers are competent to fulfil their roles and responsibilities.

This means firms now need to consider whether to remove the 30 minute requirement from their internal policy and procedures.  How does a firm demonstrate that structured learning has been of benefit if the activity only lasts 10 minutes long?  I guess this is where testing comes into play.

Some professional bodies produce online material (eg webinars or pod casts), advisers review the material and then have to complete a test to prove their understanding.  Perhaps we’ll see more innovation in this area.

How Ruleguard can help you:

Ruleguard is an industry-leading software platform designed to help regulated firms manage the burden of evidencing and monitoring compliance.  It has a range of tools to help firms fulfil their obligations across the UK, Europe and APAC regions.

Ruleguard for SM&CR is an end-to-end technology solution designed to help firms reduce the cost and regulatory risk arising from compliance with the Senior Managers and Certification Regime.

Using Ruleguard, firms can document every employee within the SM&CR population and organise all of the information needed to comply with the rules.

Get in touch with the Ruleguard team to learn more on 020 3965 2166 or [email protected].