FSA Supervisor training

supervisor training

FSA Supervisor training

This blog looks at how effective FCA Supervisor training can help your business. This isn’t a topic that excites many people – but it should! If you want to get the best out of your people and your business, then read on. This is something you need to get right.

Client best interests

The FCA will review the post-RDR advice process in 2020.  This is all about evidencing whether the FCA’s objectives have been met and identifying any gaps that are still work in progress.  To date, comments from the FCA have been largely supportive of the changes introduced by RDR. But as ever, regulation continues to evolve its thinking.

To date, the FCA has shown little appetite to operate as a ‘price regulator’. It has the power to impose a price cap but, with a few exceptions, it’s chosen largely not to do so. That said, expressions such as “costs” and “value for money” are increasingly being used by the FCA.  Importantly, it has indicated that costs will also form part of next year’s post-RDR review.

And it’s not just the regulator. Many advisory firms will also have first hand experience of clients who query what their services cost them. Perhaps MiFID has contributed to this or maybe some clients are just becoming more curious about how businesses earn their fees.

Either way, the writing appears to be on the wall.  Some fund managers have reduced their costs whilst advice charges appear, overall, to have steadily risen across the market over the last few years.  Advice firms may come under pressure to reduce their fees, offer clients more, or become better at demonstrating the value of what they provide to clients.  Most businesses would probably prefer the latter, but how?

Effective supervisor training

There are a number of ways to communicate ‘value’ to a client. In this article, I’ll focus on the role that supervision can play. Forget about just giving a ‘tick in the box’, I mean proper effective supervision. This starts with having meaningful processes and documentation as part of a T&C scheme.

Many firms I work with use documentation that  first saw the light of day 10 or 20 years ago. It might have moved on a little – the odd tweak here or there – but the trained eye can still spot bits that were first introduced by the PIA!  For example, it hasn’t been a regulatory requirement for retail investment advisers to hand over a business card to new clients for over 10 years now. So why do I still often see this as a mandatory area that advisers are expected to demonstrate? A clearer focus on what is actually relevant for a business would be beneficial.

Let me give you another example. Does the observation aid you use focus on monitoring the process that the adviser follows, or the experience the client receives? There’s probably a 99% chance it’s the former. In reality, most observation forms set out the process the adviser must follow so that the FCA Conduct of Business rules can be evidenced. This is very understandable from a compliance point of view, but it doesn’t help to embed the relationship-focused adviser skills that clients increasingly expect.

Supervision can only add value if:

  1. The tools we use, i.e. observation aids, are fit for purpose and reflect what we are trying to achieve, and
  2.  Our people managers (or supervisors) are able to use them skilfully.

It’s all about the relationship

So to summarise, many firms use a T&C observation form that is out of date and is little more than a compliance check list.  I started this article by suggesting that ‘value for money’ will come under greater scrutiny from both the FCA and clients who increasingly expect more. The question is whether our processes (such as observation aids) and our supervisors are up to the task of delivering what the client will increasingly expect from us in the future. From what I see, the profession does provide a great service to clients; its a matter of how much the client values and recognises this. The key element of this is the relationship the adviser has with the client.

Developing the relationship skills of our client-facing staff should be a business priority. How we communicate the value we provide should be a priority. Developing the skills of our supervisors should be a priority. If we do this, ‘cost’ becomes less of an issue because our value to our clients is clear for all to see.

Click here to access a 21st Century T&C coaching tool

Click here for details of our in-house supervisor training

Click here for the CityWire report





Marie Patterson
Ian Patterson