Arrested development

Training and development has long been recognised as playing a significant part in the success of broking firms. However, it has also historically been the case that many brokers do not have the time and resources to invest sufficiently in this area. The question is, have Financial Services Authority requirements helped to push training further up the agenda, and are sufficient resources available to brokers to help fulfil these requirements in a cost-efficient way?

One view that is widely held across the industry is that FSA regulation has simply served to formalise what brokers were doing anyway. As Jill Hamilton, director at Hamilton Leigh, comments: "Training has always been high on our agenda and hopefully for most brokers but the FSA requirements have improved the recording of training, which is itself beneficial to employee confidence and therefore performance."

According to Derek Findlayson, UK business development manager at Groupama Insurances, those small to medium-sized brokers that have been successful in growing their business faster than the market norm have increasingly been focusing on investing in the development of their people. Findlayson adds, however that: "Without doubt, regulation has increased the importance of making this an integral part of how you run your business on a day by day basis."

Not a regulatory issue

Steve White, head of compliance and training at the British Insurance Brokers' Association, asserts that it is an issue that was very much on the agenda for brokers pre-FSA. He adds: "Training and competence isn't a regulatory issue - it is a business issue. Nobody willingly takes on incompetent staff. The regulatory aspect is about firms being a bit more focused on the questions 'what does competence mean?' and 'how do we demonstrate that our staff are achieving it?'"

The good news is that training resources, both within and outside the industry, are adapting to ensure they can fulfil broker needs. There are in fact numerous resources emerging which aim to help brokers train their staff and meet competency requirements. However, this in itself can present an added problem as brokers need to assess the options, identify exactly what it is they need and how best to deliver it to their employees. There also remains the essential fact that busy brokers will need to find time to formally monitor their training progress.

Hamilton comments: "FSA requirements put a disproportionate financial pressure on smaller brokers but there are numerous training providers offering their services, and some excellent sponsorships available both within the industry and externally, including government initiatives if you know where to look. A big issue however is still the enormous amount of time that needs to be spent arranging, monitoring, recording and appraising training."

Ian Brown, compliance director with Protectagroup, advises: "You will get approached by a lot of people. However, really ask around for advice and assistance because you will be surprised what you will hear and what is out there. You can go to local government agencies, you can look on the web, because there is more and more guidance appearing there. Talk to insurance companies because they may have a number of good connections. There is also an awful lot to be said for talking to other people in the profession. Ask around - you will be amazed how much people are prepared to help."

White emphasises the key significance of the competence question, observing that this is among the most common areas to come up in his experience of regulatory enquiries. He explains that while the FSA is interested in competencies, it is up to individual broking firms to identify the competencies an employee needs and then to measure whether that employee has got them. "You have to work out what your staff member is employed to do, what skills they need to do the job and then you measure their performance accordingly. Where you find a gap, you train."

Steve Wellard, the CII's head of communications, also points to the importance of identifying gaps in knowledge. The CII provides a job role and competency framework, which is accessible free on its website. Wellard comments: "What we would advise is that you use the competency framework and then carry out a gap analysis of your organisation." Wellard adds that the focus should not solely be on exams and formal training courses. "There are numerous ways to keep yourself up to date and informed, in addition to the more formal education."

Many industry professionals recognise that a common gap in knowledge is in the softer business skills. White observes: "As a sector, we are very good at supplying our staff with the technical knowledge. What we aren't quite so good at is the interpersonal side - the communication skills, negotiation, team working. A lot of firms make assumptions that staff have those skills. Any business assumptions are dangerous things unless you have measured and monitored and that is what the FSA expects you to do." Again, however, things are moving forwards, and for example, both the CII and Biba offer courses related to more 'soft' or interpersonal skills.

So, how should a busy broker set about finding the right training resource? In addition to the courses offered by industry bodies, Hamilton advises: "Do some research into the sponsored services available from insurers and outside sources for both industry and soft skills."

There has been a growth in the number of online resources available to brokers, and these can be particularly beneficial for employees who find it difficult to be flexible with their working hours or find it hard to attend off-site courses. Hamilton is enthusiastic about online arrangements but warns that they do require employees' commitment. "They are not only cost-effective, time efficient and available to a multiple base but also are easily monitored and evidenced," adds Hamilton.

White observes that some subjects lend themselves more to PC-based training than others, warning against teaching interpersonal skills through sitting at a computer.

In addition to online solutions and independent consultants, insurers are increasingly keen to support brokers through the provision of help and advice. Also, bodies like the CII and Biba offer an expanding range of solutions for brokers. Some resources are free but a comprehensive training approach will inevitably come at a cost. Findlayson observes that brokers should however view this as an investment in the future of their business, rather than as a cost.

For some, it is exactly this ability to view training and development as a business investment that will be a key factor in a broker's success going forwards. Dominic d'Inverno, Primary Broker Services' managing director London and South East, emphasises: "Brokers need to view investing in people as a key resource. People have got to see the long term return that they can get from investing in staff training and development. The problem is, it all seems to have become a bit too short-termist."

Appropriate competence

It is certainly difficult to avoid the fact that whichever training route a broker chooses, there will be a cost element. As Findlayson explains: "The need for brokers to demonstrate an appropriate level of competence to ensure that they meet their regulatory responsibilities and treat customers fairly will inevitably push training higher up the agenda and will clearly add cost, given the likely inability of the smallest brokers to manage training in-house." He asserts, however, that: "While this is a challenge for these intermediaries, it will obviously help to drive up standards and that can only be a good thing in the longer term."

While FSA regulation has been at the forefront of training discussions recently, it is not the only factor pushing training up the agenda currently. Issues such as skills shortages, increased competition and the need to retain talented staff have all contributed to an increasing sense of urgency. d'Inverno comments: "With the advent of more consolidators and networks, training and development is also becoming about survival. If you are going to survive in the face of the competition out there, then the quality of your staff will be key."

With suitable new recruits still thin on the ground, the prospect of a structured career development path can also help. "We believe that having a professional development route is a key marketing tool in helping attract people to your firm," asserts Wellard.

Hamilton agrees: "Many an interviewee mentions wishing to leave an existing employer due to lack of adequate training so clearly it is an issue and something career-minded prospective employees are going to take into account. When starting in this profession, many enter straight from school or university - an education environment. It is, therefore, appropriate to continue this steady progression right from this initial stage."

Brown recalls that when he joined Protectagroup, the company's training philosophy was certainly a factor. He adds: "A lot of people move to develop their careers and the only way you will do this is through a company that has a really positive attitude to training. That is what attracts good people in. Attracting good people is becoming more competitive and that it is where the differentiators come through."

The message is that there is no shortage of reasons why brokers should be focusing on the training and development of their staff - from regulatory requirements to competitive pressures. There is also no shortage of resources that are responding and adapting to brokers' needs. As Findlayson concludes: "Training will be a 'need to have', not a 'nice to have' and this might be a fundamental change for some brokers."

A RECRUITMENT CONSULTANT'S POINT OF VIEW

Having a structured training program would help attract more candidates into the broking industry - potential candidates with little or no experience prefer to join an organisation where they will receive strong training.

Candidates value structured training relatively highly within most industries, and insurance is no exception. Candidates are savvy; it is a huge benefit to be credible with clients as an insurance broker and training can assist in achieving this, therefore, candidates understand that in order to progress they need to join organisations who will invest in their potential and allow them to progress rapidly up the career ladder. The training and development on offer with different firms is often used as a gauge of likely career advancements, growth and prospects.

My experience shows that training within insurance brokers is sadly not a priority. The view is very much that training and development is achieved 'on the job', and experience is gained by performing the various duties at hand. The only real training and learning that is demonstrable is that gained from studying for professional qualifications such as ACII. The agenda however for training may well change in the future now that the Financial Services Authority have responsibility for compliance and trading practices.

Robert Charles, director, insurance division, Joslin Rowe.