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Model route to better T&C

An industry that nurtures active debate over its important issues must surely be a healthy one. Measured by that yardstick, our own industry is showing pleasingly robust signs of life.

One of the more hotly debated areas of recent years is that of training and competence and its role in developing professional standards within the financial services sector.

To some in our industry, training and competence has simply been another piece of regulation designed to add to the costs of running a business and reduce the amount of time available for more profitable activities. At the other end of the spectrum are those who have been prepared to invest the time and money to make training and competence an integral and added-value part of the business.

However, over the last year or so, there has been an increased understanding from both camps that, like it or not, the T&C regime is here to stay and is unlikely to become diluted in its transition to the Financial Services Authority.

In looking at professional development, I find it useful to keep a very simple and familiar model in mind.

This model suggests that the path to true professional development lies in combining the right proportions of knowledge and skills with a third ingredient slightly more difficult to define.

In my model, I have called this "attitude" but it might equally be called habit, behaviour or simply acceptance of change. I will deal with this third element later on but let us take a look first at knowledge and skills and some of the links there are with the principles of T&C.


People in our industry possess a ready ability and desire to acquire knowledge. Most of us actively maintain our knowledge base, perhaps by studying for formal qualifications or simply keeping abreast of the rapid changes in the technical or regulatory environment in which we work.

For advisers regulated by the PIA, the need for a basic understanding of the industry and its practices is also dri ven by the regulatory requirement to achieve the benchmark qualification.

This has given rise to another of the issues currently under debate – whether or not the standard of the benchmark qualification needs to be ratcheted up to reflect the desired improvements in the quality of advice given to the public.

Those who are advocating the AFPC syllabus as a basic test of competence are probably missing the point. Professional development is not necessarily about setting entry level qualifications so high that only a select few can meet them. It is about ensuring that new entrants to the industry have a firm initial footing within a structured and supervised environment. As they gain more knowledge and, importantly, experience, they become able to move into more challenging areas.

In these later stages, the AFPC certainly has a role to play and will become even more important if the regulators move further towards permitted activities as a method of policing the industry.

Currently, the PIA&#39s training advisory group is looking at the benchmark qualification and its adequacy. I would be very surprised if we see any major shift in thinking in the near future although there may be scope for some refinements to reflect the need to att ract the right kind of person into the industry in the next millennium.

As for the AFPC syllabus, as a test of knowledge, it is clearly considerably more challenging than many entrants are prepared for. Evidence of this is in the very high rate of failure across the range of papers currently available. My own company has run some revision days for AFPC candidates and it is surprising to see the number of people who come along to revise but who have yet to open course materials.

The truth is that the AFPC syllabus must be taken seriously and there are very few of us who would be able to pass any of the papers without some pretty intensive study. For many, regardless of their knowledge, there is the additional challenge of mastering the right exam technique to see them through. This leads me neatly to the next factor in my model.


If we think of knowledge as being the what to do, then skills are the how to do it. Some skills come naturally, others have to be learnt. Even those skills we already possess can be improved and honed.

The PIA&#39s T&C rules are rigid in their requirement for advisers to be adequately supervised by individuals with competent assessment and coaching skills. One of the main advantages of this is the opportunity it gives for advisers to get objective feedback about their performance, particularly about how they are applying their knowledge in practice during the sales process.

Skilful assessment, when followed by targeted coaching or training within the CPD framework, is an invaluable way to ensure that skills are kept sharp and that all the knowledge an adviser has acquired is deployed to optimum effect.

The supervisor/adviser relationship is key to the success of any T&C scheme. It not only benefits the individual adviser but it can also be the means by which best practice is disseminated throughout the firm, widening and strengthening the skills base.

Naturally, the process pivots on the skills of the supervisor. There are some app ointed supervisors who are excellent advisers in their own right but who do not have the skills to assess someone else&#39s performance and to coach them. The good news, however, is that help is available. Many product providers now offer supervisor training of one kind or another. My own company, for example, sponsors skills-based training for supervisors involving the acquisition of four National Vocational Qualification units.


We have looked at the factors covering what to do and how to do it. The third element, attitude, is about why should I do it? This is a less tangible aspect of professional development. Arguably, if it was in place throughout the industry, there would be no need for T&C rules.

Over the last year or so, I have spoken to many firms about their T&C arrangements. Some have consciously opted for what I think of as a minimalist approach, with the goal of keeping the regulators at arm&#39s length. Many others are striving to make T&C work and to earn its keep.

No matter which of these positions a firm adopts, it has normally been preceded by a business decision within the firm to take one route or the other or something in between.

Too often, however, firms have made no conscious decision beyond the appointment of a T&C officer, who then has to battle with the rest of the establishment to make any progress whatsoever. This indicates that the attitude within the firm is not going to work in harmony with the other two elements of the model and that progress towards genuine professional development will be limited.

On an individual level, someone may have an abundance of knowledge but no motivation to improve the skills which would apply it effectively or, conversely, may have a variety of skills but rigidly res ist acquiring the knowledge which would allow him to use them. In either case, what is missing is an attitude that accepts that, ultimately, responsibility for professional development lies as much with the individual as with the firm that employs him.

Completing the model

So while we can congratulate ourselves on the high level of our collective knowledge and skills, we should all now be concentrating on adopting the right attitude within the industry to complete the professional development model. Once attitudes have improved sufficiently, we may well be in a position to escape some of the prescription forced upon us by the rules.


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