How to effectively plan your FCA Compliance Training

Financial services providers have to be authorised by the financial conduct agency (FCA). Being FCA compliant essentially means that the company in question has successfully been through the application process and is therefore approved by the FCA. This ensures that they can legally carry out the financial services activities to which they have been approved.

Being authorised by the FCA is a mandatory requirement for any business that intends to carry out activities specified by the Regulated Activities Order 2001 or the Payment Services Regulations 2017. If a business fits one of these profiles, they must register.

FCA compliance is a sign to consumers that a financial product or service is trusted and reliable. It is often referred to as the ‘gold standard’ and is something people actively look for when researching or choosing a financial service.

If your company does not adhere to the rules, regulations and outcomes expected by the FCA, there are consequences that can be carried out by the Enforcement division. This can include:

• withdrawing a firm’s authorisation
• suspending firms and individuals from undertaking regulated activities
• issuing fines against those who breach the rules
• publishing details of warnings

The severity of the outcome depends on the specific circumstances, and more information surrounding enforcement can be found on the FCA's Regulatory Enforcement page.

The FCA state that approved persons must:

• meet and abide by the rules of the FCA fit and proper test
• comply with the Conduct Rules
• report anything that could affect their ongoing fitness and propriety to them and the authorised firm

There are full details of the FCA Conduct Rules, and the FCA fit and proper test on the FCA Requirements of approved persons webpage. 

In summary, the Conduct Rules, which apply to all employees within a firm, set the standard of good personal conduct and influence the culture, standards and policies of a firm as a whole.

There are a number of elements to the FCA Compliance Requirements. These include staff training and record keeping. To read the full requirements, visit the FCA training and competence page.

As part of the FCA application process, a number of procedures and documents must be created. This includes a “Compliance Monitoring Programme” which must be sent as part of the application.

An FCA compliance monitoring programme must describe the actions the holder of the compliance oversight function and their staff will take to ensure the Applicant complies with the FCA’s rules and guidance at all times.

In the FCA’s Compliance authorisation application guide they state that this in particular includes:

• What checks will take place
• How often the checks should take place, as appropriate to the procedure being checked – this might be daily, weekly, monthly, quarterly, annually or another period specified by the FCA;
• Who will carry out the checks – this is the role of the person who will make the checks such as the Compliance Officer, Training and Competence Officer, Money Laundering Reporting Officer; and
• What records of the checks will be kept to confirm they have taken place.

As you can see, an organisation’s FCA ‘Compliance Monitoring Programme’ should include a plan outlining how the required skills and knowledge of the relevant parties will be maintained, and assessed, through appropriate methods, and how all of these will be reported.

The FCA states that achieving and maintaining FCA compliance must include staff training. Within your ‘Compliance Monitoring Programme’ document, your organisation can demonstrate how you have gained and maintained the knowledge required to conduct business within the framework of the FCA regulations.

In a landscape of updates and changes to regulations, regular and monitored staff training is a necessity.

• Not to be mistaken for a trivial or optional task, financial training should be carried out in line with the most recent regulation updates.
• Training must not be left to lapse or become outdated
• This training must be implemented alongside FCA’s specific timelines regarding any new regulations they introduce, which may result in more frequent or sporadic training needed to be carried out
• Each individual must thoroughly understand what the regulations mean for their organisation and how to put their learnings into practise
• This training must both provide the relevant information, and ensure a practical understanding and competency levels. Testing for appropriate competency following training is important.
• Training for FCA compliance is not just a one-off box ticking exercise. Keeping on top of changes to any FCA regulations and also ensuring refresher courses are provided when needed is a fundamental part of maintaining your FCA compliance.

More information surrounding the importance of training can be found on this FCA compliance page.With so much essential information being provided and updated which relate specifically to an organisations’ ways of working and customers, it is vital that the right training is carried out.

A training plan for FCA compliance should include the specific ‘how’ of your company compliance training, and there are key areas to consider for all financial organisations.

In your training plan think about:

• How you will keep updated with regulations
• How the information will be used within a training setting
• How you will ensure training updates are carried out in the required timeframes and FCA deadlines
• How you will be assessing the skills and knowledge needed to be FCA compliant
• Understanding the auditing and FCA compliance monitoring process and how it will be carried out
• Ensure training records are accurate and up to date in line with your plan

You will need to establish robust processes and methods to action all of the above points.

When it comes to  FCA compliance, there is undeniably a lot of plates to keep spinning. Whether you are trying to keep on top of the changing regulations and certification surrounding employees or want to see who has had the most up to date training, maintaining this at both an individual and organisational level is a challenging task.

Furthermore, the consequences of letting training lapse or not keeping up to date with the latest legislation can be detrimental to the reputation of your organisation and its relationship with the FCA.

However, this isn’t something that you necessarily need to handle on your own. There are training providers who will be able to offer your organisation a tailored training solution. This can include Financial Services eLearning course and refreshers, a catalogue of content or a full Learning Management System (LMS). With the right tools at your fingertips, it can be much more easily managed. 

Record keeping needs to be taken seriously when it comes to FCA compliance and training. Documents must be kept up to date and on hand to be offered as proof of due diligence, which will form a vital part of your FCA compliance training plan.

This should include all organisational information concerning:

• Training
  
  
• Competence
  
  
• Supervision
  
  
• Recruitment
  
  

Recorded documentation must be kept for a minimum of five years, at which point it can be destroyed if no longer needed.

However, it is not just records of compliance and training at an organisational level that is required.  It’s essential that organisations also track the current compliance status and training needs of each individual.

Managers need to be able to see and understand the following easily and succinctly:

• who has completed what training
  
  
• what training is outstanding
  
  
• what is the deadline for completion of each piece of training to maintain compliance
  
  
• what training needs are coming up for each individual
  
  

Being aware and on top of these areas is absolutely vital in ensuring your company is, and remains, FCA compliant.

With the ongoing nature of training for compliance in financial services, not only the paper trail, but the proactive organisation of different types of training can be difficult to manage confidently, such as:

• training for different individuals at different times of year
  
  
• a rolling programme of training for onboarding and ‘time to competency’
  
  
• training as and when required due to regulation updates

When deciding on a financial services eLearning provider, be sure to ask the following questions:

• Are they partnered with industry specialists such as the Chartered Insurance Institute (CII), Financial Services Qualification System (FSQS), ZISHI Cornerstone (FSTP), UK Finance, The Chartered Banker and The Investment Association?
• Are they CPD accredited?
• Can they offer modern learning techniques for learner engagement and knowledge retention?
• Is the company well established, secure and reliable to be able to provide the level of training needed?