Guidance for creating a T&C scheme

• When the document was approved for use and by whom. For example, the Directors or Partners;
• Who it applies to.  For example, all staff connected with regulated activity; and
• Who is responsible for maintaining it.

The job description or role profile is the foundation for recording competence. You should state:

• That a role profile is a requirement for all jobs;
• Where the record is kept; and
• How they are kept up to date and relevant.

This should set out the recruitment process prior to a conditional job offer:

• How competence of applicants will be tested and by whom;
• What the minimum period for referencing is;
• How gaps in employment will be investigated, explained and evidence obtained;
• What is unacceptable. For example, someone who is an undischarged bankrupt;
• Whether a DBS check is required; and
• Whether a credit check is required;

In addition, when the applicant completes the application for authorisation, it should set out:

• Who sends it to the FCA;
• That the person cannot take up their responsibilities until approval is received;
• What changes have to be notified to the FCA; and
• How on-going Fitness and Propriety will be monitored.

New starters should be briefed about your organisation as part of the induction.  For example:

• Your culture, values, history;
• What behaviour is expected;
• What products and services you offer; and
• Who they will report to.

This applies to everyone and can be formal or informal. For most staff this is where you will explain how they will achieve and be assessed as competent on an ongoing basis. For example, through your annual appraisal or certification process.

All new starters will need appropriate training, either on a face-to-face basis, or more commonly by eLearning.

This training will also need to be repeated on a regular basis to ensure knowledge is retained and new policies and processes are shared as part of maintaining competence. 

• Define what a trainee is, i.e. someone who takes up the role for the first time; and
• Define what an experienced recruit is i.e. someone who has been signed off as competent by their previous employer.

Everyone will need some training to be assessed as a competent individual for your firm. For example, they will not know your procedures and forms for giving advice.

If an examination is required to achieve competence, this section should state:

• What the appropriate examination is;
• What support will be given to achieve a pass; and
• The timescales aligned to that achievement.

In addition, it will set out:

• The training they will undertake to achieve competent standards;
• When that training should be undertaken;
• Who is responsible for making sure they receive the training; and
• How skills and knowledge will be assessed. 

This section should state:

• What is the measure of competence;
• How long they have to achieve competence sign-off;
• Who will assess them;
• When will they be assessed;
• What evidence of competence is needed; and
• What happens if they cannot achieve that standard.

What level of supervision is appropriate and when.  For example:

• All staff should be closely supervised until they reach competence.
• Describe the difference between close supervision/direct supervision and normal supervision levels.
• Explain what spans of control are appropriate for your different business areas, for example, 1 supervisor for every 12 advisers/investment managers with a maximum of 2 trainees.

State what essential knowledge and skills are required for supervising others.  For example:

• Assessing performance and competence;
• Monitoring;
• Coaching; and
• Presenting, etc.

This information should appear in more detail in the role profile.

State whether an external examination is required as well as how the training will be delivered, when and by whom. 

This should state:

• What the measure of competence is;
• How long they have to achieve competent sign-off;
• Who will assess them;
• When they will be assessed;
• What evidence of competence is needed; and
• What happens if they cannot achieve the standard set.

In what ways will competence be maintained? How will the essential elements be addressed? For example:

• Generic knowledge.  For example, markets and regulatory and legal requirements.
• Specific knowledge and your organisation’s procedures, policies and processes.
• Skills relevant to the role.
• How ongoing competence will be measured and when. For example, quarterly for advisers and investment managers and annually for other staff.
• How on ongoing competence will be measured for different groups of staff.

Who is responsible for maintaining competence? For example, will your organisation ensure that appropriate training and testing is delivered, or is it the responsibility of the individual? (keep in mind the FCA’s obligations clearly fall upon the organisation).

Will your organisation apply for an individual’s Statement of professional standing or will that be left to the individual? 

What key records will be held centrally by your organisation to evidence compliance.  For example:

• Date commenced in the role.
• Assessment and referencing on joining.
• Competent sign-off form and evidence.
• A copy of records to evidence competence is maintained.
• Copies of regular reviews by supervisors. 

The controls you have put in place to ensure that people follow the procedures.  For example:

• Recruitment files are double checked for completeness.
• 10% of CDP records are checked to ensure competence is maintained.
• The percentage of appraisals/reviews returned when due.

State also who is responsible for doing this and to whom any reports/MI is sent (the Approved Person responsible for overseeing the Scheme).

State the data that will be collected and by whom in order to make returns to the FCA. For example:

• Total number of staff.
• Number of advisers.
• Number assessed as competent.
• Number of supervisors of advisers.