Tag Archives: supervisor

FCA T&C supervisor

FCA T&C Supervisor: what you need to know

This article answers the five key questions we get asked about being a FCA T&C supervisor.

Rules on Training and Competence (T&C) have been around since 1993 – over 25 years ago – so there isn’t anything particularly new about T&C. That said, there are still plenty of myths and misunderstandings about what it is, and why is it important.

Before I start, let me just share with you something I was told many years ago by a regulator. They said: “T&C is only as good as its supervisors”. To this day, nothing could be more true.

1. Who needs to be FCA T&C supervisor?

First of all, let’s accept that the term ‘supervisor’ is widely used everywhere as a generic description for a people manager. Under the FCA T&C rules, however, this is a specific regulatory expression which has specific FCA rules that need to be met (see the next section).

In simple terms, anyone who provides advice needs to be supervised. So a retail investment adviser, mortgage adviser or general insurance adviser (e.g. those that advise on protection policies) must have a supervisor under FCA T&C rules. If you don’t supervise these three roles (or some specific back-office roles that you’ll usually only fine in a product provider or fund manager), then you aren’t a ‘supervisor’ under FCA T&C rules. Simple.

But what about anyone who ‘manages’ para-planners? They are not a T&C supervisor but under the Senior Managers and Certification Regime (SM&CR), anyone performing a ‘significant harm function’ does need to be supervised. If your business defines a para-planner as a ‘significant harm function’, then they must have a supervisor. Similarly for MiFID firms, roles like para-planners will be classed as ‘information givers’.  They also need to be appropriately supervised unless classified as competent.

As a result, the population that needs to be ‘supervised’ under various FCA requirements is a lot bigger than just those that are subject to T&C. Many firms will also use the FCA T&C supervisor rules (see next section) as best practice for people who supervise these other roles, even if they don’t strictly need to.

Competence v compliance. Read more about why competence is now a firm-wide issue.

2. What are the FCA rules that apply to FCA T&C supervisors?

Under FCA rule 2.1.4, there are four things that a T&C supervisor must be able to do and be able to prove:

  1. Coaching skills. This isn’t defined anywhere so this could also include feedback skills. Click here for more information of what this might look like.
  2. Assessment skills. The ‘C’ in T&C stands for ‘Competence’ so this rule expects the supervisor to assess (or contribute to the assessment) of an individual’s competence.
  3. [Relevant] Technical knowledge. It’s difficult to assess what someone is saying is correct if you know nothing about the subject. As a result, supervisors are expected to have technical knowledge so they can identify inaccurate or misleading information.
  4. Level 4 Qualification. This is required where ‘trainees’ are being supervised. If the supervisor has a team of competent advisers, then this isn’t required under T&C rules, but is obviously desirable in many cases.

3. How do you prove a T&C supervisor is competent?

Most people will have heard the expression ‘if it isn’t written down, it didn’t happen’. So how do you prove that a T&C supervisor is competent?

Firstly, you need to know that the FCA rarely accepts the principle of ‘grandfathering’. If you are relying solely on 25 years of experience as a manager as your evidence that you are a competent T&C supervisor, then think again. Have you worked for a wide range of businesses in a leadership role? Nah, that won’t cut mustard either. You might have great skills and experience, but these in isolation can’t prove you are competent T&C supervisor.

So what do you have to do? I’ll look at this from two perspectives:

  1. On appointment as a FCA T&C supervisor. I’ve already looked at what the FCA rules require you to demonstrate. The difficulty for most is demonstrating the two skills – assessing and coaching. These could be evidenced in the workplace or by attending our in-house workshop – which is designed to do just that. It should be possible to evidence relevant technical knowledge easily enough using CPD and a level 4 qualification will be straightforward in that you either have it, or you don’t.
  2. Ongoing competence. If the FCA have gone to the effort of identifying two specific skills they expect supervisors to demonstrate before they supervise, sensibly the process would be repeated every 2-3 years to make sure these are still current. In my experience, however, rarely does this happen. There should be documentary evidence of the supervisors activities, e.g. observation aids, development plans etc and this helps to demonstrate their competence. In addition, CPD should include evidence of ongoing supervisory development. Some people will also take the CII’s J07 exam for supervisors. In short, a range of sensible CPD activities that relate to supervision should do the trick, along with a periodic re-assessment of their supervisory skills.

4. What should T&C supervision look like?

Supervision is likely to include a blend of different measures which include:

  • observations in the workplace
  • monitoring indirect evidence such as KPIs (key performance indicators)
  • file reviews
  • 1-2-1 meetings
  • agreeing CPD and activities which support and help develop staff

Click here for more details.

5. Does everyone need to be supervised the same way?

The short answer is ‘no’. In fact, it would be strange if they were. Different people need different levels of supervision. New advisers, or people who are inexperienced in a particular area, will need more support than more experienced colleagues who are familiar with their roles.

So an experienced adviser may only need supervising at a high level. For example, one client observation a year, quarterly reviews of KPIs, a 10% sample of standard advice files, and perhaps quarterly 1-2-1’s.

Effective T&C supervision, like any effective people management, is about following a process and treating everyone differently based upon their needs. Ask yourself ‘how can I most add value?’ and you shouldn’t go to far wrong.

Click here for more detail on T&C best practice.

I hope this provides some useful insights.

Ian Patterson (Author of the CII’s J07 study text, Supervision in a Regulated Environment)

For details of our in-house supervisor training, email me at info@pstgroup.co.uk

T&C Supervisor: House of Change

As a senior manager or T&C supervisor, dealing with change is an important part of the job. But why do people react to change in different ways and, as a people manager, what can we do to manage this? These areas will be explored in more detail in this article.

Let’s face it, change is just part of the process in financial services. On the face of it, that’s pretty negative comment as most people mistakenly regard change is a threat. In practice, we’d go backwards without it.

If you are a business owner or a T&C supervisor, one of your key tasks is to help ensure that working with change becomes part of your culture. People need to be willing and able to work through change. In reality, people experience different reactions to change at different times. So everyone who is managing this process needs to be able to recognise these different reactions and respond accordingly.

One way of doing so is sometimes referred to as the house change. When faced with change, people tend to go through four responses to it. These ‘states’ to change can be represented as different rooms in a house. This is represented below.

The four stages of change

The house change helps to develop our understanding of how people deal with change. For this to be successful, people need to work through the rooms or contentment, resistance, exploration and commitment. But as I mentioned, they will react in different ways and at different speeds. Some people, unfortunately, never complete the journey.

The first task is to identify where your people are. So how do you know which room people are in? (See below).

Strategies for managing people through change

Once you recognise where each individual is, the next step is to adapt your approach to help them move through the rooms from contentment through resistance, exploration and on to commitment. Here are some brief ideas on the actions a T&C supervisor could take.

For someone who is cosily tucked away in the room of contentment, it’s important to create awareness. Describe the problem and the reasons for the change. The key focus is that the ‘status quo’ will or must change and describe why.  At this stage, there’s no point talking about the benefits of changing because someone in this room doesn’t yet accept that there will be any change. The individual has to accept that change will affect them in some way before they will move on.  Provide information, acknowledge that is normal to have some concerns and treat them with respect. Give them time to think about the position but recognised that their views may need to be confronted.

Once in the room of resistance, there is an acknowledgement that they can’t ignore change. But they’re far from having bought into it or decided to change anything. Be clear about the reasons for their resistance and allow them to let off steam. Discuss the position regularly and continue to reassure them that some people will find it difficult to change. Identify some quick wins, encourage, and focus on the positive side of change.

Offering coaching is unlikely to succeed in these two rooms as the need, first and foremost, is to change the individual’s mindset. As a minimum, they need to accept the change will happen and that it will have an impact on them. Without this, they may never move on and performance management – not development – may be required.

In the room of exploration people looking to get to grips with the change. Build on the quick wins, reward successes and encourage the sharing views on how improvements can be made. Offer reassurance, support and provide regular development and guidance where required. Work on a ‘one step at a time’ basis and keep things simple.

As people become more comfortable and familiar with the change, people will move into the room of commitment. By now, the benefits of the change should be more obvious. Measure progress and demonstrate business benefits. Provide support and development (but in a less directive way). In this room, identify longer term goals and continue to provide positive reinforcement. Don’t ignore these people because they may still slip back into the other rooms, especially if the change has not yet become ‘business as usual’, or they are left to their own devices.

These final two rooms are on the right hand side of the house. People in these rooms usually recognise the need to refresh or develop their skills and are generally positive about appropriate coaching, support and development from a T&C supervisor.

Going forward

The house of change provides a simple representation of the stages people typically go through when faced with change. It is also important to remember that people will go through these rooms at different speeds so just because you are in the room of commitment, doesn’t mean that everyone else will be.

If you want to know more about our services for T&C supervisors, click here.

Interesting article on dealing with change. Click here

If you want to know more about SM&CR, click here.

Remember, identify which room people are in and then determine how to tailor your approach. At a time when change is increasing regarded as the norm is – not the exception – there should be plenty of chances arriving shortly to practice this.

Ian Patterson

Author of the Chartered Insurance Institute’s J07 study text (Supervision in a Regulated Environment) and AF6 (Senior Management and Supervision)