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Financial Services Regulatory Compliance - Global consulting

Training and competence

The FCA places great importance on firms developing and maintaining effective employee training and competence arrangements.

Complicated financial services jargon, procedures, processes and products mean that customers are dependent upon the competency and integrity of those with whom they do business.

The training and competence regime helps to support the FCA’s consumer protection objective. This regime aims to ensure that customers in regulated financial services markets deal with firm employees who are trained and competent.

We are able to offer you guidance on a variety of aspects that every financial services firm needs to consider in relation to training and competence, for example:

Regulatory Health Checks

The FCA supervisory framework is becoming an ever more complex arena in which to carry out business with regulation evolving all the time. Perhaps the most significant effect that firms will feel is in the area of supervision. The FCA’s approach to supervision of firms will be to contribute to delivery of its objective to protect and enhance the integrity of the UK financial system. When consumer detriment does occur the FCA will robustly seek redress for consumers.

The new approach to supervision demonstrates that the FCA’s focus has changed from assessing technical compliance to quantifying major business risks. To achieve this aim, supervision will be more judgement-based, starting at the firm’s business model and strategy and leading to early intervention on the basis of assessment of conduct risk rather than crystallised issues.

We are able to walk you through the supervisory framework and how the framework affects your business. Should you require a more detailed review of your systems and controls to ensure suitability in the evolving regulatory regime, our regulatory health-check can provide you with the insight required.

Our regulatory health-check includes:

  • Is the business sustainable from a conduct perspective?
  • What are the current and future conduct risks?
  • Are the business model, culture, product supervision consumer-centric?
  • What do the margins on products tell you and where are the growth areas?
  • How effective is the firm in identifying, managing and mitigating conduct risks?
  • Are products targeted at customer needs?
  • Do the firm’s processes support appropriate customer outcomes?
  • Is the fair treatment of customers considered after the point of sale?
  • Is Senior Management taking individual responsibility for the right areas?
  • What level of interaction occurs between Senior Management and Governing bodies?
  • Does the firm’s culture orientate the firm towards doing the right thing?

The FCA has been clear in its communications and Risk Outlook that there will be much more focus on wholesale as well as retail conduct supervision. While accepting that different customers have different experience and expertise, no categories of customers will avoid the scope of supervision.