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SMCR; Coaching for Competence?

The SMCR advent calendar

If your house is anything like mine it will already have a deluge of advent calendars littering the shelves and the run down to Christmas will have already begun to gather at a pace.

However, the one advent calendar we are missing is the Senior Manager & Certification Regime (SMCR) one. Since it will only run until Dec 9th maybe that’s why, and also because, well let’s face it, that would be a tad sad to actually admit to having an SMCR advent calendar 🙁

Many of the firms affected by this (aka every FCA regulated firm) will hopefully be reading this with a cautious air of smugness and if so good for you!. All key staff have been categorised and trained and all the necessary contractual, policy and procedural updates are in place.

Now, much has already been written about SMCR, a google search hits you up with more info/consultants/systems/trainers and ‘experts’ than you can shake a stick at.

So, instead, I wanted to focus on a more forward-looking part of SMCR, and one I think about a lot when working with clients and that is Competency, and in particular how you come to that conclusion as a manager in order to certify ‘certified employees’ within your firm.

“If a role meets the definition of a Certification Function, a firm needs to make sure that anyone doing that role has been certified. This means the firm must check and confirm that the person is fit and proper to do the job, and issue them with a certificate”

FIT & Proper Test – again?

Is this just a copy and paste from the FCA FIT test? Well, yes and NO!

According to the FCA, this certification process must be done at least once a year, and firms should take into account whether the individual:

• has obtained a qualification

• has undergone, or is undergoing, training

• possesses a level of competence

These all sound fairly obvious but if you are a certifying manager the question you need to solve for is how do you get comfortable with this added obligation. 

You are not suddenly being asked to act as mini self-regulators but rather to have good oversight of the competency of those who work for you.

Qualifications – think so, doesn’t Compliance make everyone do that CISI UK Regs paper thingy when they join?

Training – we have tons of that every year, online and CPD covers it…I think

Competence – sure, I mean all my team all know how to do their job!

Perhaps in the past this ‘sign off’ was more implicit in your year-end discussion. Now you will need to attest to this. So what should you focus on?

What this ACTUALLY means:

  • The satisfactory clearance of the criminal records check; 
  • The firm obtaining a satisfactory regulatory reference(s)
  • Compliance with any SMCR-related induction obligations; and 
  • Passing of the firm’s fitness & propriety (F&P) assessment, both at the outset and annually

This may imply something of a supervisory role for a certifying manager but SMCR places competency at its core. Both in the assessment of those performing significant harm function roles aka Certifed Persons but also in the Conduct Rules itself:

CR2.  You must act with due skill, care and diligence

Your Manager’s Toolkit

So as a certifying manger is it ok to merely take this onboard and make sure you mention SMCR competency somewhere in mid and year-end discussions?

Do you have even have enough insight into all these areas? Likely via a combination of MI, systems, and governance within your firm you will be able to gather together all the required elements.

Ultimately how do you change your appraisal or review processes to encompass and embrace these?

Yes, embrace, remember:

SMCR = Increased Personal Accountability

Supervision and Coaching – mutually different?

Supervision is often passive and doesn’t instill ownership of leadership behaviours, driving the culture and agenda of your firm, whereas coaching is about enabling better leaders.

Coaching & SMCR – say what?!

So if you are an SMCR certifying manger with a greater degree of personal accountability then you need to focus on maximising performance and growing your people

So just maybe learning some simple but effective practices to apply coaching within your teams regardless of whether or not you have coached or attended coaching training in your career could start to become a really important consideration. 

Some coaching areas for you to think about:

• The benefits of coaching on performance and deepening the manager/employee relationship

• Identify key skills needed to coach and models for coaching

• Knowing when to coach and when to employ other forms of management oversight (delegation, feedback, direction, mentoring)

What You Really Need to Remember from All This

  • SMCR allows you a one year grace period from December 9th to go through the competency assessment before issuing a certificate to the designated certified employees
  • As a manager, there is enhanced accountability on you and your assessment of competency of your employees
  • Be involved, don’t just accept the procedures being put in place – you need to get comfortable with how to assess on an ongoing basis
  • Ultimately, this is a nudge, focus on maximising performance and growing your people – yes you need to do this as part of SMCR but it’s a virtuous circle; this is good for you, the firm and your clients
  • Seize this as an opportunity to be a better manager and consider deploying some basic but effective coaching techniques (or go ahead and ask for some training on how to do this – we can help)

About this author

Matt Fotherby

Financial Markets, Compliance & Regulations

Matt Fotherby

Matt is our Founder and a passionate trainer.

His interest in education stems from his 10 years as an Account Executive looking after Global Hedge Fund and Asset Management clients. This led Matt to join the coveted Financial Markets Education team at UBS, a unique in-house education team that specialised in running a curriculum of financial market and product classes for both UBS employees and clients. Matt was responsible for building out the client offering; managing programs, creating content and teaching courses.

As financial markets entered a significant period of regulatory change Matt pivoted to take his client experience and market knowledge to focus on Regulations and Compliance topics.

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