How to Design Your T&C
Proposition for the Post RDR
World
John Williams
Principal, Skillfit Solutions
How to Design Your T&C Proposition
for the Post RDR World
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Why Have a T&C Scheme
RDR – T&C Impact
T&C for the Post RDR World
• Competence
• CPD
• New Beginners
Questions
Why Have a T&C Scheme?
Regulatory
compliance
Commercial
benefit
Why Have a T&C Scheme?
Regulatory
compliance:
Commercial
benefit:
• Risk mitigation
• Customer
fairness
• Minimum
standards
• One size fits all
• Customer
experience
and value
• Business
model
• Competitive
advantage
RDR – T&C Impact
Competence
• Focus on ‘competence’ and who is responsible
• Training is just one of the solutions
Professionalism
• Appropriate Qualification
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Level 4
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Explicit and formal requirement
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Role of Accredited Body
SPS
APER compliance
• CPD
• Independent Verification
RDR – T&C Impact
Competence Measurements
• Qualification time limit
• CPD – hours and type
Data Capture and Reporting
• Professional Standards data
• Quarterly reporting
Notifications
• Significant events
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Competence and supervision failings
APER compliance failure
RDR – T&C Impact
Is This Good Enough for the Post RDR World?
• Entry level standard
• One size fits all
• Monitoring to avoid failure
Questions for you
• Firms’ responsibilities?
• Business and advice model?
• Professionalism?
• Will this be right for your customers?
RDR – T&C Impact
“Firms should ensure that their systems
and controls, including competence of employees, keep
pace with any changes in their strategy and business
model and with any new services the firm is offering”
FSA’s Retail Conduct Risk Outlook 2012
T&C for the Post RDR World
Commercial Benefit
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Customer experience and value
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Business model
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Competitive advantage
T&C for the Post RDR World
Commercial Benefit
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Customer experience and value
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Business model
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Competitive advantage
…. Delivered through the Quality of Your People!
T&C for the Post RDR World
Competence
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Defined as:
Knowledge ~ Skills ~ Expertise ~ Ethics
T&C for the Post RDR World
Competence
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Defined as:
Knowledge ~ Skills ~ Expertise ~ Ethics
• In the context of YOUR:
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Business model
Services offered
Customers
Reputation
T&C for the Post RDR World
Competence
Define Standards
Advice
Skills
Technical
Skills
Ethical
Behaviours
Competent Adviser
T&C for the Post RDR World
Competence
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Core
Firm Specific
Application
Qualification
T&C for the Post RDR World
Competence
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Core
Firm Specific
Application
Qualification
• Advice Process
• Information
Management
• Technology
T&C for the Post RDR World
Competence
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Core
Firm Specific
Application
Qualification
• Advice Process • Fairness
• Information
• Conduct
Management
• Customer
• Technology
Experience
T&C for the Post RDR World
Competence
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Assessment – Robust, Meaningful and Current
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Evidence
Confidence
Supervisors
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Development required?
Critical skills – observation / coaching / feedback
KPI Framework
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Business model changes
New risks
Data or Information?
T&C for the Post RDR World
Competence – Resources
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On-line competence systems
National Occupational Standards – Financial Planning
PFS – Pathways guides
FSA Resources for SME firms – fact sheets, guides,
case studies, good practice, etc.
Financial Skills Partnership – T&C Guidance
T&C for the Post RDR World
CPD
Some Questions
Who decides?
What to use?
Maintenance or Development?
Where to get it from?
How much is enough?
What evidence should I keep?
T&C for the Post RDR World
CPD
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Who decides?
• Individual – APER
• Firm – SYSC competent employees rule
• Accredited Body – independent verification
T&C for the Post RDR World
CPD – How to Decide
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Gap-fill is the way forward!
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Current competence standards
Current performance record
• Self-appraisal
• Performance review
• Performance evidence e.g. KPIs, test results, customer
feedback etc.
• Performance development
Development plan – ideally quarterly cycle
T&C for the Post RDR World
CPD for Professionals
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Select carefully – there is plenty of choice!
It has to be relevant to qualify – but all CPD doesn’t have
to qualify!
Complete the development process
Maintain the evidence you need
Work closely with your Accredited Body
T&C for the Post RDR World
T&C for Beginners
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Trainee financial advisers:
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Recruitment
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Training
T&C for the Post RDR World
T&C for Beginners – Trainees
T&C for the Post RDR World
T&C for Beginners – Trainees
Factors which make this more difficult:
• New standards
• Longer lead-in time
• Higher costs
• Smaller talent pools
• Increased risk
T&C for the Post RDR World
T&C for Beginners – Trainees
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Career structures
New adviser programmes e.g. Financial Adviser School
Graduate programmes
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Financial services degrees
Graduate Foundation College
Internships
Resources
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PFS Pathways
Directions website
T&C for the Post RDR World
“....where our judgement is that a particular aspect of a firm’s
business model – its product selection, its remuneration
practices, its training or recruitment for instance – is likely
to give rise to poor customer outcomes. We won’t wait to
see if those outcomes occur.”
Tracy McDermott, Director of Enforcement and Financial
Crime, FSA
T&C for the Post RDR World
Any Questions?