How rigorous are the checks you carry out on individuals performing certified roles in your firm?

Whilst certification doesn’t need FCA approval, you need to confirm your senior managers and advisers are able to fulfil their roles at least annually. Passing the ‘fit and proper’ test isn’t easy – there are three components that must be considered and assessed in full:

  1. Honesty, integrity and reputation
  2. Competence and capability
  3. Financial soundness

Of these three elements, it is usually competence that proves the most challenging to evidence for firms both large and small.

What should you be assessing?

The checks you undertake need to be relevant to the job role, not a simple list of key performance indicators that everyone is measured against.

You need to determine if the person is taking steps to develop as an individual. Let’s take CPD as an example. It’s not OK for an adviser to adopt the ‘how do I achieve the 35 hours I need to comply?’ approach. They need to carry out an honest appraisal of the gaps in their knowledge and proactively seek suitable solutions. Therefore, your CPD plans should reflect their aspirations as well as the firm’s business objectives.

If an individual loses their job as a result of poor monitoring and assessment, they could decide to take your firm to an employment tribunal, which is time consuming, costly and embarrassing for all involved.


Using the SPS renewal date as an end point for annual certification helps to spread the supervisor workload and stops everyone rushing around trying to fill in gaps in your evidence for an entire month.

You need to agree on what ‘good’ looks like for your firm and your certified individuals, the activities to be undertaken and a plan to spread these across the year.

Ongoing activities allow for continual monitoring and assessment and ensure the supervisor and individual are in an informed position at one-to-one meetings, which should take place ideally quarterly, but no less than six-monthly.

Don’t leave monitoring activities until the final quarter of the year. Scrabbling around to meet the deadline risks putting perfectly competent people in a position where the certification renewal isn’t possible, because there is potential for development requirements to be identified too late to be completed prior to re-certification.

This is not a simple box-ticking exercise. Would you be keen to sign someone off as competent if you knew monitoring activities were lacking? As a senior manager, you could have some awkward questions to answer if this was found to be the case and the firm had failed to provide suitable ongoing supervision.


Regulated references are required in a format determined by the FCA and are mandatory when onboarding an individual to a certified role. Deeming someone competent without suitable evidence or the absence of development plans, is a risky business.

SMCR requires firms to carry out suitable due diligence on all new recruits taking on a certified role. When referencing, you must go back six years and add in opensource searches, for example, on social media or Google, to check there has been no adverse press relating to them and that their ethics and culture align with those of your firm.

Without carrying out these soft searches, how would you know if an adviser is subject to any bans or restrictions? If the firm they worked for previously went under, there would be no one from whom you could request an employer reference.

A disqualified SMF could turn up at another firm and apply for a certified role. How would you know about the ban? As advisers are not specifically authorised under certification with the FCA, a previous restriction on activity or criminal conviction could go unseen if the due diligence on your new recruit isn’t robust enough. Ultimately, the decision to employ falls to each firm.

Good practise

Make sure you have clear initial objectives, supported by regular supervision of certified roles, to allow potential shortfalls to be identified at an early stage and development plans to be set in motion to provide support and improvement.

The harsh reality is, certain individuals are not suitable for certified roles, but having time to assess their abilities will allow for all parties to come to an amicable resolution.

Rigorous referencing and continual assessment prevent uncomfortable surprises and your approach to certification makes a strong statement about the culture of your firm. Ultimately, this is what lies at the heart of all FCA compliance.

If you would like help creating policies and procedures for the assessment of certified individuals, don’t hesitate to contact us on (0161) 521 8641 or email:

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