Tom Hegarty: Be ready for CPD spot checks

It is now more than five years since the continuous professional development framework was introduced.

Although there is an abundance of resources available to help advisers with their requirements, there are still those being found with inadequate records.

Accredited bodies have now spot checked around half the adviser population, with incomplete or insufficient records causing major headaches for the many who have not made this a priority.

A reminder of the rules

Along with the higher minimum qualification requirement, a more robust CPD framework was introduced with the RDR in order to raise standards and professionalism, building trust and confidence in the sector.

Although CPD had previously existed, the new framework made it mandatory for all retail investment advisers to complete a minimum of 35 hours in each 12-month period, of which at least 21 hours needed to be structured activities.

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To recap, examples of structured CPD activities include participation in courses, seminars, lectures, conferences, workshops and e-learning.

Structured activities also need to be at least 30 minutes long. Unstructured activities include research, relevant industry-wide reading or coaching.

Whether you keep your CPD records manually or online, make sure you have them ready to submit at any point

Whether structured or unstructured, all CPD activity should be relevant for the qualification level, have clear learning outcomes and be able to be verified by an accredited body.

Advisers must make an annual declaration that they have completed their CPD requirements to their chosen accredited body. They would then obtain a statement of professional standing.

Accredited bodies

There are currently six accredited bodies in the UK, appointed by the FCA to ensure advisers subscribe to the relevant standards of professionalism.

But accredited bodies need to meet certain standards themselves.

In being able to verify advisers, they must carry out a random 10 per cent CPD sample check, informing the FCA of any that do not meet the rules.

Although these are minimum requirements, accredited bodies can exceed the 10 per cent sample check if they choose and are also free to set a standard for their members or subscribers over and above.

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I am aware of instances where advisers have been checked more than once in the past five years. This must mean accredited bodies are either checking more than their 10 per cent minimum sample or choosing their random targets on an annual basis.

This means, in theory, every adviser has a one-in-10 chance of being spot checked, regardless of whether they have been previously.

The spot checks

So what happens when an adviser gets spot checked? The process may vary depending on the accredited body, but the most popular will issue a letter or email requesting the adviser to submit their CPD records for the previous 12-month period.

They provide a strict one-month deadline for all CPD activity to be submitted along with some simple guidance on how to do this. If records are incomplete or of an insufficient quality, more work is needed for an adviser’s SPS renewal.

There are huge benefits to managing CPD efficiently. Ensuring it is of sufficient quality and keeping all records in good order will enable the right information to be provided whenever requested. This will save you a lot of time and hassle.

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Include information on what activities you have completed, if they are structured or unstructured, when they were completed and how long you spent on them.

Evidence should also be kept for each activity. This could include agendas, certificates and, perhaps most importantly, reflective statements. These will explain how each activity was relevant, what was learnt and how it will be applied in your role going forward.

Whether you keep your CPD records manually or use an online system, make sure you have them ready to submit at any point, as and when required.

Tom Hegarty is managing director of the New Model Business Academy 

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