Andy Bennett examines the pros and cons of the RDR, the challenges it presents to firms and its employees, and considers what steps should be taken to accommodate for this new regulation.
The Financial Services Authority (FSA) has put the finishing touches to the retail distribution review (RDR) in its consultation paper CP10/14. A major focus of the RDR is the need to increase benchmark skills to a level where financial advice is seen as a respected profession on the same level as other professions, with particular emphasis on the understanding of tax, risk and ethics within the financial sector.
Admittedly, raising the professional standards will not be achieved by raising the level of benchmark qualifications alone. There needs to be an ongoing culture of learning and compulsory continuous professional development (CPD) and a continual focus on ethical behaviour. A minimum amount of 35 hours CPD per year has been set out by the FSA, the majority of which should be structured learning.
The success of the RDR should see an embedded culture of talent development within firms and improved confidence in financial products and services amongst consumers.
"Creating a knowledge and skills culture where attaining and actively maintaining professional skills is considered the norm is a key factor; as is removing the perceived barriers to the creation of this culture – namely, time and effort."This all seems like a noble objective, but at a time when firms and employees have been coping with uncertainty and instability in the financial markets, the extra time and cost involved in meeting these new skillset requirements has raised genuine concerns. Yet it is in this type of environment where there should be greater incentive to develop the talent and improve the quality of relationships already established. In a recent survey we ran at 7city, 50% of the HR professionals we consulted currently do not operate a structured CPD programme to fill in the gaps post qualification.
There is also the valid worry for those who have not studied for an exam or qualification for many years. These are often the most valuable members to the firm and neither firm nor employee can see value in time away from the desk. As a result those responsible for managing training requirements within a firm may well experience significant and, to an extent, understandable push-back. If dealt with effectively, this can be short-term resistance.
So what are the options for meeting these challenges directly in an attempt to turn the RDR and any further developments into a positive experience for staff?
Initially, getting staff on board is crucial. Creating a knowledge and skills culture where attaining and actively maintaining professional skills is considered the norm is a key factor; as is removing the perceived barriers to the creation of this culture – namely, time and effort.
Training for training's sake does not work. If the training does not develop the individual talents of employees, the resistance to continued professional development will remain. Acceptance can only occur if the effort put in by the employees begins to reap dividends for the employees.
All individuals have different needs and preferred methods of effective learning. They are also often fully aware of their own weaknesses and where they wish to be developed. The challenge is to create a training programme that encompasses a variety of flexible learning approaches, offering solutions for each participant and keeping the business happy.
The need to make the development meaningful to the individual is clear, but this does not address the issue that development takes time and this generally means time away from the desk. This can be managed in many ways.
Flexible in-house solutions allow individuals to balance time away from the workplace with effective study. The in-house location means that courses can be half-day or even intensive working lunches, addressing specific needs of specific employees. This not only provides the flexibility of when the training occurs, but also what is delivered and how it is delivered. In-house is particularly suited to the private banking and financial advice sector who pride themselves on customising their own services. Employees are far more receptive to training delivered in this fashion as they appreciate the planning the firm has put in to providing them with an approach to meet their needs.
Distance learning gives the ultimate flexibility with regard to when and where study will occur, and setting clear and attainable timeframes with periodic hurdles will remove the possibility of 'if' it will occur. Formal and informal study groups that promote peer discussion and encouragement ensures the endeavour becomes less of a lonely experience and more of a common objective. Distance learning can be given a customised framework by introducing proactive mentoring for those employees who are seen to be struggling. Our RDR survey revealed that over 86% of HR professionals are planning to offer classroom day courses and over 92% will offer distance learning options as well to meet the flexible needs of their employees.
Online study portals enable those who are travelling to access study materials electronically. These portals are able to track and record progress, either through an open framework or through time specific hurdles. Training coordinators can observe the progress of staff and, if necessary, arrange mentor calls and additional assistance for those falling behind or appearing to struggle. Furthermore, virtual classrooms enable individuals to hear tutor explanations and recap areas that need consolidation. They even allow staff in regional or overseas offices to access classroom courses that would otherwise have been unavailable to them. Online helpdesks and forums give employees direct access to expert knowledge and first-hand experience.
The FSA has recently announced in the consultation paper CP10/12 that it intends to widen the scope of this new professionalism to include advisors in the mortgage industry and those employees performing significant influence functions within the financial services. Although formal examinations are not the main focus, directed CPD will become a core issue in more than the retail advice sector. This emphasises the importance for establishing robust methods of development now in order to continue to meet the changing regulatory landscape.
The strategies for instilling a new professionalism in the financial services, therefore, are: managing the development of talent as a positive experience; engaging in flexible learning and study solutions; and access to online learning and administrative portals. This will help establish a culture of professional development well beyond the mandatory qualifications and into the foreseeable future. When this occurs, we will know the RDR and the push in competence and ethics has been a success.
Andy Bennett is head of certificates training at 7city Learning and is also lead tutor for a large programme of exam training for a financial services firm. Andy Bennett taught for 10 years within both the UK and Spain and held senior positions responsible for academic advancement as well as head of department. 7city is a CISI accredited provider offering a suite of structured learning events which serve as CPD top-up options for individuals and firms.
