The FCA has published guidance for firms on its expectations regarding Continuing Professional Development (CPD). During the coronavirus pandemic, it expects firms to continue to demonstrate that relevant individuals remain competent to carry out their work, which includes employees as referred to in the Training and Competence sourcebook and employees carrying on insurance distribution activities as referred to in SYSC 28.2 and TC 4.2.
However, due to the exceptional circumstances surrounding coronavirus, the FCA has said that it is also allowing firms to defer individuals’ CPD to the next CPD year.
During the current crisis, the regulator will temporarily allow firms to let individuals in exceptional circumstances carry over any uncompleted CPD hours to the next CPD year (i.e. the next 12-month period in which to complete the relevant CPD). This will apply to CPD years ending before 1 April 2021.
The FCA also states that it expects individuals to keep up to date with its regulatory developments relating to coronavirus. This could count towards CPD as relevant. Firms are also advised to look into other available online equivalents to training courses or other ways for staff to get the necessary CPD hours. When making a decision to carry over CPD hours, firms should take these other options into account.
How can firms help staff continue their CPD?
The FCA states that it expects most individuals will be able to continue completing CPD whilst on furlough or working from home. CPD activities can include e-learning and other similar content which can be completed at home. It expects that firms will support furloughed staff with materials to complete their CPD hours.
Which firms are most likely to be affected by continuing CPD requirements?
In spite of the above, the FCA recognises that there could be exceptional circumstances when individuals may have difficulty completing the required minimum CPD hours.
This is likely to have an impact on firms:
- who must ensure their retail investment advisers complete the required minimum 35 hours of CPD and get independent verification from an accredited body that the firm has met this requirement
- carrying on insurance distribution activities, who must ensure that each relevant employee completes a minimum of 15 hours of professional training or development in each 12-month period
What are the conditions for carrying over CPD hours?
Firms can allow CPD hours to be carried over when an individual, due to the current exceptional circumstances, will not be able to complete their CPD hours in their current CPD period.
As a result, the individual must then complete the carried-over CPD hours within the next CPD period. These will be treated as part of the required CPD hours of that next CPD year on top of the hours already required.
The FCA provides the following example: “if an adviser who is required to complete a minimum of 35 hours of CPD, has completed 25 CPD hours and has 2 months left of the current CPD year, the firm may allow them to transfer 10 hours to their next CPD year. This means that in the next CPD year the adviser will need to complete 45 CPD hours. This can be structured and/or unstructured learning depending on the make-up of the outstanding CPD.”
What situations count as ‘exceptional’?
The following circumstances are listed by the FCA as ‘exceptional’:
- When individuals during the current pandemic:
- are needed to carry out extra duties to manage risks, and/or to provide support, to consumers and businesses during the current situation
- have caring responsibilities, such as having to care for a partner, child, parent, grandparent or sibling
- have difficulties accessing CPD material – for example, due to technical difficulties or unavailability of material, and
- Where it is not realistic to expect the individual also to fulfil the CPD requirements.
Firms will need to take into account the following:
- the individual’s role and responsibilities;
- the individual’s knowledge and skill development (including any relevant Covid-19 related training) during the current CPD year and their continued competence;
- the number of CPD hours they intend to carry over;
- the individual’s circumstances during the current situation; and
- the reasons why the individual is unable to complete the relevant CPD.
Firms should record their decision alongside the reasons for it, including the number of CPD hours being carried over to the next CPD year. They do not need to report this to the FCA.
If you need any help with the above, please get in touch with your RWA Business Manager. You can also contact the RWA team via the helpdesk on 01604 709509 or email@example.com.