Training and competence for financial advisers: rules and evidence

Ask most advice firms how they know their advisers are competent and you will hear about qualifications, CPD logs and the annual Statement of Professional Standing. Those matter, but they mostly show that an adviser has learned something. The harder question, and the one the rules return to again and again, is whether the firm has checked that the adviser is applying that learning well in front of clients.

This guide sets out the core training and competence rules for financial advisers, what each requires, and how firms can build evidence of competence that holds up to scrutiny.

The training and competence rules at a glance

The main requirements sit in chapter 2 of the FCA's Training and Competence sourcebook, TC 2.1, alongside the professional standards regime for advisers.

Continuing professional development

Under TC 2.1.15R, retail investment advisers must complete "a minimum of 35 hours of appropriate continuing professional development in each 12 month period." The guidance at TC 2.1.16G adds that this should include "no less than 21 hours of structured continuing professional development activities".

The word "appropriate" deserves attention. Thirty-five hours of activity unrelated to an adviser's work, or to the gaps in their competence, meets the arithmetic but not the purpose. The strongest CPD plans start from evidence of where each adviser needs to improve and point their learning there.

The Statement of Professional Standing

According to the FCA's professional standards for advisers, advisers need an annual Statement of Professional Standing (SPS) from an accredited body. The verification behind it lasts a "maximum of 12 months", so it has to be renewed each year. Accredited bodies also "carry out checks on at least 10% of advisers", and an adviser may be asked to submit CPD records for review, so those records need to be accurate and available.

A practical point for firms: track SPS expiry dates centrally rather than relying on each adviser to remember. An expired SPS is an easy problem to prevent and an awkward one to explain.

Regular and frequent competence reviews

TC 2.1.12R requires firms to "review on a regular and frequent basis employees' competence". This is the part of the regime that relies most on the firm's own judgement, and a part that is easy to evidence thinly.

In some firms, competence review means a supervisor sitting in on the occasional meeting, checking a few files and writing up impressions. That can work, but it has known weaknesses:

• Inconsistency. Two assessors can mark the same adviser differently.
• Drift. The standard shifts over time, and it becomes unclear which version applied to a past assessment.
• Thin evidence. A note saying "good meeting" does not show what the adviser did well, or what they missed.
• Low coverage. One observed meeting a quarter says little about the rest.

Competence review also connects directly to the Consumer Duty. The FCA's Consumer Duty focus areas for advice and wealth include "Risks to providing unsuitable advice" and "Tackling poor identification of clients with characteristics of vulnerability by wealth managers". Both are, at root, questions about how competently advisers do their work.

Evidencing training and competence for financial advisers

A competence file that stands up to scrutiny usually brings together:

1. A defined standard. The competencies the firm expects, written down, with a date and version number.
2. Assessments against that standard. Each one recording which version of the standard was used, who assessed and when.
3. Evidence behind each judgement. What the adviser actually said or did, not just a score.
4. File and meeting reviews. Results from file checks and observed or recorded meetings.
5. Development actions. What the adviser will work on, linked to the gaps found, and how CPD supports it.
6. Follow-up. Whether the next assessment shows improvement.
7. SPS and CPD records. Current, complete and easy to produce.

The common theme is consistency: the same standard applied the same way, with the evidence kept.

Where Freeboard fits

Freeboard was built to give competence assessment the consistency spreadsheets struggle to provide. It runs off the client meetings your firm already records, keeping a meeting library in sync with Fireflies, so assessment becomes a by-product of normal work.

• Advisers are scored against defined skill profiles, the competencies your firm cares about.
• The scoring standard is versioned and dated, so you can always say which version applied to a given assessment.
• Attitude to risk, capacity for loss, knowledge and understanding and vulnerability are each assessed separately, with confidence, decision readiness and evidence completeness scored alongside.
• Every conclusion is backed by the client's own words, quoted from the meeting.
• It reads client documents you have staged, such as fact finds and valuations, and can pull risk questionnaire responses.
• A learning loop means a score corrected once carries its reasoning forward.
• Reports are branded, editable and export to Word or PDF.

By our estimate, an assessment that takes around ninety minutes by hand takes minutes with Freeboard. It is built to support a structured training and competence scheme. It does not decide whether an adviser is competent: that judgement belongs to the supervisor and the firm. For the coaching side, Asclto turns recorded meetings into a scored report with a written coaching plan. We cover both in adviser competency assessment without the spreadsheet and coaching financial advisers.

Frequently asked questions

How many CPD hours do financial advisers need?

TC 2.1.15R requires "a minimum of 35 hours of appropriate continuing professional development in each 12 month period." TC 2.1.16G says this should include "no less than 21 hours of structured continuing professional development activities".

How long does a Statement of Professional Standing last?

The verification behind an SPS lasts a "maximum of 12 months", so advisers need a new SPS from an accredited body each year.

How often should firms review adviser competence?

TC 2.1.12R requires firms to review employees' competence "on a regular and frequent basis". Firms should decide, and record, a review frequency that meets that wording for their own advisers and risks.

To see Freeboard assess an adviser against a dated standard, read about Freeboard or book a twenty-minute demo with Adam Booth on Microsoft Teams, run live on a demo firm with nothing to prepare.