2. How to Design Your T&C Proposition for the Post RDR World John Williams Principal, Skillfit Solutions

3. 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

4. Why Have a T&C Scheme? Regulatory compliance Commercial benefit

5. Why Have a T&C Scheme? Regulatory compliance: Risk mitigation Customer fairness Minimum standards One size fits all Commercial benefit: Customer experience and value Business model Competitive advantage

6. RDR – T&C Impact Competence 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

7. 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 Competence and supervision failings APER compliance failure

8. 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?

9. 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

10. T&C for the Post RDR World Commercial Benefit Customer experience and value Business model Competitive advantage

11. T&C for the Post RDR World Commercial Benefit Customer experience and value Business model Competitive advantage …. Delivered through the Quality of Your People!

12. T&C for the Post RDR World Competence Defined as: Knowledge ~ Skills ~ Expertise ~ Ethics

13. T&C for the Post RDR World Competence Defined as: Knowledge ~ Skills ~ Expertise ~ Ethics In the context of YOUR: Business model Services offered Customers Reputation

14. T&C for the Post RDR World Competence Define Standards

15. T&C for the Post RDR World Competence Core Firm Specific Application Qualification

16. T&C for the Post RDR World Competence Advice Process Information Management Technology Core Firm Specific Application Qualification

17. T&C for the Post RDR World Competence Fairness Conduct Customer Experience Advice Process Information Management Technology Core Firm Specific Application Qualification

18. T&C for the Post RDR World 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?

19. T&C for the Post RDR World 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

20. T&C for the Post RDR World CPD Some Questions Maintenance or Development? What to use? How much is enough? Where to get it from? Who decides? What evidence should I keep?

21. T&C for the Post RDR World CPD Who decides? Individual – APER Firm – SYSC competent employees rule Accredited Body – independent verification

22. T&C for the Post RDR World 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

23. T&C for the Post RDR World 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

24. T&C for the Post RDR World T&C for Beginners Trainee financial advisers: Recruitment Training

25. T&C for the Post RDR World T&C for Beginners – Trainees

26. 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

27. T&C for the Post RDR World T&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

28. 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

29. T&C for the Post RDR World Any Questions?