Nature or Nurture? The role of Training and Competence (T&C) in modern financial services

An industry that encourages debate over important issues is a healthy one. Consumer Duty is driving such discussions within Financial Services, emphasising embedding processes that align with the new regulatory framework. One area sparking debate is Training and Competence (T&C), which plays a key role in fostering a competent workforce and upholding professional standards that directly impact customer outcomes.

The FCA’s T&C requirements compel firms to ensure that relevant staff possess the necessary competencies for their roles. For many, this has limited T&C schemes to professionals needing specific qualifications. Some have viewed T&C as a regulatory burden that adds costs and reduces time for profitable activities. However, others see it as an opportunity, integrating T&C into their business strategies to create value and purpose, especially as the Duty focuses on outcomes, culture, and conduct.

The difference between training and competence

Training involves more than simply delivering knowledge; it also requires opportunities to practise and acquire skills. Listening to an instructor is educational, but not necessarily training. Training must lead to skill acquisition. However, being trained doesn’t always equate to competence.

Competence is the ability to apply learned skills and behaviours to achieve job outcomes. A person may learn a skill in a classroom, but the ability to use that skill in real scenarios determines competence. Competence, then, is the combination of training, skills, experience, and knowledge applied effectively to perform tasks. It’s more concerned with results than mere abilities.

For instance, while someone might be trained to perform a job, competence reflects an evolution where skills and knowledge are applied capably. It is an ongoing process where training turns into real-world proficiency.

Skill vs. Competence

If knowledge tells us what needs to be done, skills show us how to do it. Some skills are innate, while others need to be learned and continually improved. A T&C scheme provides a platform for feedback, offering individuals insights on how they are applying knowledge, whether during sales or in handling complaints.

Coaches and supervisors play a crucial role in this process. They, too, must be competent to effectively assess and coach employees. With a Continuous Professional Development (CPD) framework, skills can be honed, and knowledge can be deployed for maximum effectiveness. The relationship between supervisors and employees is key to T&C success, as it not only

enhances individual growth but also spreads best practices throughout the firm, strengthening the entire workforce.

Cultivating a T&C culture

Why invest time and resources into managing competence? Some may argue that if a firm’s culture, conduct, and customer outcomes are already strong, T&C is unnecessary. In my 25 years in the industry, I have seen firms with a minimalist approach to T&C, doing just enough to tick regulatory boxes. I’ve also seen firms that appointed T&C managers but failed to make meaningful improvements due to lack of support.

In both cases, it’s a sign that the firm may not be prioritising reputation, outcomes, or professional development. On an individual level, employees may have extensive knowledge but lack motivation to improve their skills or vice versa—plenty of skills but resistance to acquiring the knowledge that would enhance them. Ultimately, professional development is as much the responsibility of the individual as it is the firms.

Many organisations I’ve worked with have recognised the importance of effectively managing competence, capability, and conduct. They have leveraged Worksmart’s solutions to develop T&C frameworks that not only meet regulatory requirements but also enhance business performance through a well-skilled workforce. Consider competitive organisations like Team GB’s Olympic squad—they don’t rest on past achievements; they constantly strive for improvement.

T&C in a modern financial services company

The regulatory landscape is increasingly complex, and staff are under constant pressure to learn, retain, and apply knowledge. This ongoing challenge underscores the need for a more advanced approach to managing competence. The minimalist approach that once sufficed must be replaced with systems and controls that foster transparency, inclusivity, and authenticity. A modern T&C framework ensures employees understand their obligations and are capable of meeting the demands of their roles.

This can be achieved by equipping supervisors and coaches with the right data, management information (MI), and insight to drive targeted actions and interventions. A modern T&C system not only facilitates compliance with Consumer Duty but also enhances workforce capability in a smart, efficient manner.

To thrive in today’s highly regulated financial services environment, firms need more than just a box-ticking approach to T&C. A proactive and well-integrated T&C system not only ensures regulatory compliance but also drives positive customer outcomes and professional development. By investing in the right tools and frameworks, firms can transform T&C from a regulatory burden into a competitive advantage.

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Nic Dent, Head of Market Engagement, Worksmart