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Training & Competence best practice

Through their Mortgage Market Review and Small firm’s assessment process, the FCA has shown their commitment to "enhancing professional standards" in the mortgage industry. Each firm should decide if the adviser has adequate experience and is suitably qualified when determining adviser status and should satisfy itself on an ongoing and frequent basis of the competence of that adviser. The diagram below sets out key indicators that would demonstrate a business has best practice procedures for training and competency.

Competency of Advisers

Indicators for ongoing competence Example benchmarks
An appropriate level of file monitoring is undertaken for each adviser and performance assessed on quality of mortgage business written. Results from file monitoring either confirm continuing competence or trigger action Firm undertakes 10% file checks per month and rates files accordingly, with action required when standards are not met
Performance in observed client visits or role plays undertaken in mortgage sales Two observed client visits per year or two role plays per year with suitable passes of 70% in mandatory and non-mandatory areas Any areas for development are logged on a training action plan
Annual knowledge tests for mortgages, firm procedures and regulatory tests 70% pass mark in all formal testing Any areas for development identified from errors are logged on a training action plan
Management information obtained and analysed to indicate risk areas and influence amount of supervision Product type, take up rate, lender spread, complaints and ratings on tests, file checks and observations reflect risk to the business
Training plans implemented and assessed on a regular basis through one-to-ones A suitable number of one-to-one assessments are undertaken on a monthly or quarterly basis
Range of on-going continuing professional development relevant to needs Continuing professional development reviewed on a quarterly basis. Ensure that this is tailored to training needs
Ongoing fit and proper checks Credit check on an annual basis and adviser declaration of fitness

Competency of Supervisors

Indicators for ongoing competence Example benchmarks
Supervisors are competent to undertake certain areas of supervision If the firm considers it appropriate, supervisors have at least the same qualifications or more than the advisers they are responsible for

Supervisors must have the necessary coaching and assessment skills

The volume and quality of supervision carried out is reviewed quarterly by a director, other competent supervisor or compliance consultant
Supervisors undertake appropriate continuing professional development to maintain their competence A director or other competent supervisor undertakes a review of the supervisors' own professional development to ensure it meets training needs
Supervisors have the knowledge, skills and experience to undertake coaching and training Firms collate feedback on the skills and abilities of the supervisors from third parties or others within the firm on annual basis

Managers observe training sessions provided by supervisors
Annual knowledge tests for mortgages, firm procedures and regulatory tests 70% pass mark in all formal testing

Any areas for development identified through errors are logged in a training action plan
Where qualifications are not required by the firm to supervise, supervisors have the relevant expertise or attend the necessary training Firms provide training courses for supervisors to attend on a twice-yearly basis to enhance skill, knowledge and expertise
Where compliance consultants audit the firm, this reaffirms the supervisors competence Firms compare external compliance reports with internal reports on an annual basis

Checks are made on quality of any remedial steps taken
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