How to Design Your T&C Proposition for the Post RDR World

How to Design Your T&C Proposition for the Post RDR World

John WilliamsPrincipal, Skillfit Solutions

How to Design Your T&C Proposition for the Post RDR World

•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?

Regulatorycompliance

Commercialbenefit

Why Have a T&C Scheme?

Regulatorycompliance:•Risk mitigation•Customer fairness•Minimum standards•One size fits all

Commercialbenefit:•Customer experience and value•Business model•Competitive advantage

RDR – T&C ImpactCompetence• Focus on ‘competence’ and who is responsible

• Training is just one of the solutions

Professionalism• Appropriate Qualification

• Level 4

• CPD• Explicit and formal requirement

• Independent Verification• Role of Accredited Body• SPS• APER compliance

RDR – T&C ImpactCompetence Measurements• Qualification time limit

• CPD – hours and type

Data Capture and Reporting• Professional Standards data

• Quarterly reporting

Notifications• Significant events

• 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

• Customer experience and value

• Business model

• Competitive advantage


Commercial Benefit

• Customer experience and value

• Business model

• Competitive advantage

…. Delivered through the Quality of Your People!


Competence•Defined as:

Knowledge ~ Skills ~ Expertise ~ Ethics


Competence•Defined as:

Knowledge ~ Skills ~ Expertise ~ Ethics

• In the context of YOUR:• Business model

• Services offered

• Customers

• Reputation


Competence Define Standards


Competence

• Core• Firm Specific• Application• Qualification


Competence

• Advice Process• Information

Management• Technology



Competence

• Fairness• Conduct• Customer

Experience

• Advice Process• Information

Management• Technology



Competence•Assessment – Robust, Meaningful and Current

• Evidence

• Confidence

•Supervisors• Development required?

• Critical skills – observation / coaching / feedback

•KPI Framework• Business model changes

• New risks

• Data or Information?


Competence – Resources

• 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


CPDSome Questions

Maintenance or Development?

What to use?

How much is enough?

Where to get it from?

Who decides?

What evidence should I keep?


CPD•Who decides?

• Individual – APER

• Firm – SYSC competent employees rule

• Accredited Body – independent verification


CPD – How to Decide•Gap-fill is the way forward!

• 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


CPD for Professionals

•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 WorldT&C for Beginners

•Trainee financial advisers:

• Recruitment

• Training


T&C for Beginners – Trainees

T&C for the Post RDR WorldT&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 WorldT&C for Beginners – Trainees

•Career structures

•New adviser programmes e.g. Financial Adviser School

•Graduate programmes• Financial services degrees

• Graduate Foundation College

• Internships

•Resources• PFS Pathways

• Directions website


“....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


Any Questions?

How to Design Your T&C Proposition for the Post RDR World

Documents

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