If you work in financial services, building a robust FCA training and competence framework is one of the most important regulatory steps your firm can take. The Financial Conduct Authority (FCA) expects firms to prove that their people are not only trained for the roles they carry out, but consistently competent over time. Get it right and you build a culture of quality advice and consumer protection. Get it wrong and you’re looking at enforcement action, reputational damage, or worse.
Here’s what you need to know to build an FCA training and competence framework that holds up under scrutiny.
What Is an FCA Training and Competence Framework?
An FCA training and competence framework is a structured system that governs how a firm ensures its employees, particularly those carrying out regulated activities, are trained to the required standard, assessed as competent, and then maintained at that level throughout their careers.
The FCA’s T&C rules primarily apply to firms and individuals carrying out activities covered by the FCA’s Training and Competence sourcebook (TC).
But even where the TC sourcebook doesn’t strictly apply, the FCA’s broader expectations under the Senior Managers and Certification Regime (SM&CR) and its Conduct Rules mean that demonstrating competence across your workforce is simply good regulatory hygiene.
What the FCA Expects from Your T&C Framework
The FCA doesn’t prescribe a single template for training and competence frameworks. Instead, it sets principles and outcomes it expects firms to achieve. These include:
- Ensuring individuals are competent before acting without supervision in a regulated role
- Assessing competence against defined, role-specific standards
- Maintaining competence through ongoing development and regular review
- Keeping records that evidence all of the above
The regulator expects firms to think carefully about what competence actually means for each role, not just whether someone has passed an exam, but whether they can apply knowledge and skills effectively in the real world.
Step 1: Define Your T&C Population
Start by identifying which roles within your firm fall under the FCA’s T&C sourcebook, and which others should be included under your wider competency framework. For each role, document:
- The regulated activities performed
- Whether the role requires a qualification
- Whether the individual is customer-facing
- The level of supervision required before they can be deemed competent
This population mapping forms the foundation of your entire FCA training and competence framework. Without it, you won’t know who your framework applies to, and you risk leaving gaps that the FCA could identify in a review.
Step 2: Set Role-Specific Competency Standards
For each role, define what “good” looks like. Competency standards within your FCA training and competence framework should cover:
- Technical knowledge — product knowledge, regulatory understanding, market awareness
- Skills — communication, fact-finding, needs analysis, suitability assessment
- Behaviours — treating customers fairly, acting with integrity, escalating concerns appropriately
Where a formal qualification is required, for example, CeMAP for mortgage advisers, this should be embedded into the standard. But qualifications are a threshold, not an endpoint. Your competency standards should go beyond simply “has passed the exam.”
Step 3: Build a Supervision Model That Works in Practice
The FCA expects firms to supervise individuals until they have been formally assessed as competent. Your supervision model should set out:
- How new entrants and role-changers are supervised
- What activities supervisors carry out (call observations, file reviews, role plays, one-to-ones)
- How supervision is documented
- The criteria that must be met before supervised status is lifted
Supervisors themselves need to be competent to supervise, an area firms frequently overlook. It’s not enough to appoint a senior adviser as a T&C supervisor without ensuring they understand the assessment criteria and can apply them consistently.
Step 4: Establish a Rigorous Assessment Process
Assessments are the mechanism through which you formally declare an individual competent under your FCA training and competence framework. A robust assessment process will include:
- Multiple assessment methods (not just observation, consider file reviews, knowledge tests, structured conversations)
- Clear pass/fail criteria linked to your competency standards
- Sign-off by a suitably authorised manager or T&C supervisor
- A documented outcome stored on the individual’s T&C record
Pay close attention to calibration. If different supervisors are applying different standards, your competency assessments become meaningless. Regular calibration sessions, where supervisors review the same case and compare their judgements, help ensure consistency across the firm.
Step 5: Design an Ongoing Competence Programme
Achieving initial competence is only the beginning. A compliant FCA training and competence framework must demonstrate that competence is actively maintained over time. Your ongoing programme should include:
- Regular one-to-ones between individuals and their T&C supervisor
- Periodic file reviews or call assessments (frequency should be risk-based)
- Annual or biannual formal competency reviews
- Continuing Professional Development (CPD) requirements with a minimum number of hours per year
- Clear processes for identifying and addressing competence concerns
Where an individual’s performance drops below the required standard, you need a remediation process, a structured plan to bring them back to competence, with a timeline and clear re-assessment criteria.
Step 6: Maintain Records That Satisfy FCA Review
The FCA will ask to see evidence of your training and competence framework in action. Your records need to demonstrate:
- When each individual achieved competence
- What assessments were conducted and by whom
- What CPD has been completed
- Any competence concerns raised and how they were resolved
Records should be held for a minimum of three years from the date they were created and longer for some roles.
Common FCA Training and Competence Framework Pitfalls
Firms that fall foul of the FCA on training and competence typically share a few common traits: frameworks that look good on paper but aren’t embedded in day-to-day management; supervisors who don’t have the time or skills to carry out meaningful assessments; CPD that is box-ticking rather than genuinely developmental; and record-keeping that is incomplete or inconsistent.
The FCA is increasingly focused on how firms evidence outcomes, not just processes. A polished T&C policy document won’t satisfy a regulator if your file review scores are poor or your complaints data suggests advisers aren’t applying their knowledge correctly.
Final Thoughts
A well-constructed FCA training and competence framework is far more than a compliance document. Done properly, it drives better outcomes for customers, reduces the risk of mis-selling, supports staff development, and gives management genuine oversight of quality across the business.
Start with your population, define what competence really means for each role, build a supervision model that works in practice, and make sure your records tell the story of how each individual achieved and maintained their competence. That’s the FCA training and competence framework the regulator is looking for and the one your customers deserve.
This article is for informational purposes only and does not constitute legal or compliance advice. Brokers should consult their compliance function or a qualified regulatory adviser for guidance specific to their business.
Written by the Ecompli founder — With over 20 years in financial services and having founded Ecompli in 2006, these blogs are written by a specialist with hands-on expertise in FCA regulation across the mortgage, general insurance, equity release, and insurance claims handling sectors.
