Everyone keeps using the term ‘competent’ but do they (including the FCA) actually understand what it means?
My opinion is that, judging by the results of Gilchrist Standard audits, many compliance advisers haven’t a clue either.
The fact is that there are three main components to assessing competence.
Consider whether someone is competent to play golf. The first thing you need to do is to make a list of the tasks you need to complete to play golf.
The first is acquire a set of golf clubs. Ideally, they should be the right set for you. Then you need to consider what you need to do with the clubs. Let us start with the basics and say that we need to hit a golf ball into a hole 300 yards away in the smallest number of shots. Along the way there might be penalties and rules which we must understand.
We then need to define what we must do to swing the club and hit the ball in the most ideal manner to achieve the goal in as few attempts to hit the ball as possible.
And having done all that we need to benchmark our efforts to decide what would be an acceptable number of shots in which to complete the task depending on our level of competence.
So, there are three key stages to the exercise.
Having created a task list and decided what ‘good and reasonable’ looks like we know what we have to do.
But that is a long way from understanding how we put all this knowledge into practice and actually get to a position so that we can try to hit the ball.
Even having the knowledge and understanding we now have to apply both those to actually hit the ball. Let us be generous and say that we are reasonably competent if we can sink the ball into the hole in six shots.
Deciding whether someone is competent at work is no different.
We decide what the job is and what outcome we want to achieve (i.e. give suitable advice to a small commercial customer). We then list all the tasks we have to undertake to achieve that aim.
Then we can benchmark all or some of the tasks.
Here is a simple example: you have to be able to answer the phone when clients ring. Benchmark. You will answer the phone within four rings, be able to put the client at ease with your manner and write a note about the conversation, signing and dating it so your supervisor can understand what has transpired.
Here is another simple example: you will complete a fact find for a client to the standard that you gather sufficient information to make a fair presentation of the risk to an insurer and to make a suitable recommendation to meet your client’s demands and needs.
Having benchmarked a task, we know what is required, we understand why it is required and we can then watch to see whether the person being assessed can do these tasks to the standard required.
Take the fact find. We can assess knowledge by asking questions. We can assess understanding by asking why we do things in a particular way. We can assess application by watching someone doing the job or by checking how they have done a job (through file checking, complaints, role play and so on).
When the FCA talk about a firm self-certifying competence, they want to see these five key steps:
- What are the tasks for the job?
- To what standard do you want to see each task performed?
- What knowledge is required (and to what level)?
- What level of understanding is required and how do you assess that your standard is met?
- Can the member of staff apply the knowledge and understanding to do the job to the standard you want?
Whether you are a small firm or a bigger firm, you need to design your own training/learning plan, ideally advised by someone who has specialised training (this might well be your compliance consultant, or it may be someone with training in T&C specifically).
At RWA, we have specialist T&C consultants trained to help you design your own plan.