Applied Competence

The new regulatory regime of training and competence does have application in the real world, says Mac Eddey, and should have more emphasis on competence

We are a great industry for putting things in boxes. Take training and competence, for example. This gets bracketed together in the same way as "sex `n' violence" - as if the two were inextricably linked. Unless I've been missing out on something all these years, they are not.

In a couple of years' time, the general insurance industry will have the benefit of full regulation. The life and pensions side has had this since 1988 and has probably made most of the mistakes it was possible to make. We would be unwise if we did not at least learn some of the lessons. Millions of pounds have been spent and, sadly, much of it has been wasted by confusing technical training and operative competence.

The result of putting training and competence in one convenient box is that we will produce training and competence schemes that are designed to assuage the regulator's mania for ticking boxes, but do little or nothing for the development of our businesses. We will miss out on a tremendous opportunity if we adopt this approach. Too often in the past our missed opportunities have come back to haunt us.

The great temptation when faced with change is for brokers to adopt the attitude of either the ostrich or the porcupine.

Porcupine brokers will be ultra-defensive. They will turn to product providers to extract the off-the-shelf course and deliver it, complete with CPD points and the box already ticked. "Job done," they will mutter and carry on in their own sweet, incompetent way.

Ostriches, of course, will do what they are best at - the square root of ... You get the picture.

So let me play a hypothetical game where under-skilled and over-stretched regulatory staff do not exist and brokers are neither porcupines nor ostriches, but have become lions.

The head of the pride wants his or her team to flourish. He or she knows they have to hunt a variety of prey and different skills and tactics will be needed for each. One doesn't sub-contract out the training of young lions to a bunch of warthogs.

Our intelligent lion will first decide what game it is that should be hunted, where it can be found and the sort of terrain that the hunters will encounter. Factors such as available cover, prevailing wind direction and the presence or absence of competitors or other quarry will also need to be considered. The head of the pride will then order a training course which will equip the would-be hunters with every possibility of success.

Our lions are now trained - but are they competent?

That's enough anthropomorphism for one article, so let me put it another way. Too much industry training is totally wasted and serves no other purpose than maybe satisfying a regulator, because it is never followed through and supported in the workplace and was never designed to be. Reliance on people who do not know how to be brokers or claims managers to train brokers and claims managers is just plain stupid.

I am not knocking the insurance companies, many of whom produce excellent technical training courses. The problem is that technical expertise, on its own, is not the same as competence in the real life situation. As someone with a brilliant future behind him, I speak from bitter, hard-won experience.

Basic grasp
I used to work for a large broker that had achieved the distinction of having the most educated, but least productive, sales force on the planet. AFPCs and ACIIs abounded. However well trained these people were, they were not competent. Unsurprisingly, we traded at a loss.

The life side has spent millions on compulsory examinations that proved only a basic grasp of knowledge, but said little or nothing about true competence. I once trained an individual from scratch to pass the full financial planning certificate in six weeks. Despite my efforts, there is no way on earth this poor soul could be classed as competent on the basis of the technical knowledge beaten into his skull in this short time. Knowledge is one thing, competence is something else.

Competence in an intermediary is, I believe, about the ability to work in partnership with one's clients. A good intermediary is multi-skilled - having empathy, observation, constructive listening skills, communication and then technical knowledge. Other skills are creativity, thoroughness, integrity, organisation - I could go on.

Competence is about the ability to apply the knowledge gained for the mutual benefit of one's clients and one's business. Yet how many training courses concentrate on application skills? How many insurance companies could supply such training?

The General Insurance Standards Council (GISC) approach to training and competence has been ground-breaking within the insurance industry, with substantial emphasis on competence to do a particular job and onmanaging a business well.

But let us be clear that such an approach can only continue if you support the regulator by embracing the self-discipline that non-prescriptive regulation demands.

Question
Consider the following statements and decide which six are most appropriate to the objective of providing customer protection:

a I passed the exam by getting 60 marks out of 100

b My employer thinks that I should get 20 out of 20 in the multiple choice test each year on regulatory and legal matters that relate to my job

c We fill in coaching forms every time impromptu on-the-job training takes place

d We fill in coaching forms every time impromptu on-the-job training takes place and my training manager checks them once a month

e I am a graduate

f I have worked in the industry for 30 years since leaving school

g I volunteered to be a compliance officer and am assessed regularly on my knowledge of GISC rules

h I am being trained to be a compliance officer

i My employer insists on qualifications before we can deal with the public

j My firm encourages qualifications as a means to promotion

k My employer feels that a high standard of generic knowledge of the insurance industry is required before I become a supervisor

l 50% of my training is about dealing with customers.