FSA Training & Competence

The Financial Services Authority (FSA) has adopted a risk based approach towards the regulation of firms, whereby it seeks to concentrate it's resources in those areas where they are most needed.

It encourages the firms that it regulates to adopt a similar approach, identifying areas of risk and taking appropriate action to reduce those risks. A key element, possibly the most important element in reducing risk, is to ensure that every member of a regulated firm achieves, maintains and improves competence in his or her role. There is a common misconception that only authorised personnel in a regulated firm are of interest to the FSA. This is quite untrue. The Regulator is quite rightly extremely concerned that every member of a firm achieves and maintains levels of competence appropriate to their role.

As noted above, the FSA encourages a risk based approach in all aspects of regulation. We have found that in contrast to this many regulated firms adopt a "lowest common denominator" approach, whereby the systems and procedures which are installed cater for the worst possible situations. In other words, are designed to prevent the incompetent or the dishonest being incompetent and dishonest. Of course this means that the great majority of authorised personnel who are neither incompetent nor dishonest have to abide by the same rules. This is a great waste of resource and can be deeply inefficient.

Haven Risk Management has developed a system using sophisticated templates which risk assesses individuals. The level of training, supervision and monitoring is then developed from this Risk Assessment, thus resource is concentrated where it is most needed.

A further advantage of this system is that it creates a meritocracy, whereby if somebody who is for example graded a "low" risk becomes complacent and his standards slip, he can be moved up to "medium" or "high" risk until such time as his activities have regained their previous standard. Similarly, those allocated as "medium" or "high" risk should always be striving to attain a lower rating in order that they are subject to less supervision.

Please contact us for further information.