This is why financial training should be regulated

Julian Roche makes the case for financial training regulation.

Reading time: 4 minutes.

Throughout the financial services industry globally, requirements for training are growing.

Whether working for a bank, an insurance company, a trading operation, brokerage or private equity firm, continuous professional development points must be earned annually, through training, and qualifications obtained before jurisdictions will permit individuals to sell, lend, manage funds, trade, or provide advice.

Yet a sharp distinction exists between the providers of financial training on the one hand, who operate outside any regulatory regime particular to them, and academic educational providers on the other, who are regulated by ministries of education and the organisations below them. 

So, for example, basic qualifications such as the proposed UK T-Level fall under the Office of Qualifications (Ofqual).

Ofqual had 191 permanent employees in 2014, and takes responsibility for ensuring that regulated qualifications reliably indicate the knowledge, skills and understanding students have demonstrated, that assessments and exams show what a student has achieved, that people – by which should probably be understood, people in the UK, have confidence in the qualifications that we regulate, and that both students and teachers have information on the full range of qualifications that it regulates. Vocational qualifications are similarly regulated.

The time has surely come for the UK, which is the world’s leading destination for financial training, to take the lead and impose a regulatory regime on the training

Another similarly well-staffed organisation, the Office for Students, regulates higher education in the UK under section 75 of the Higher Education and Research Act 2017 (HERA).

The principles of UK higher education regulation are that all of the around 2.3m UK students, from all backgrounds, and with the ability and desire to study get the access they require, receive a high quality academic experience, with their interests protected while they study or in the event of provider, campus or course closure, are able to progress into employment or further study, and their qualifications hold their value over time, and receive value for money. 


With the huge expansion of the UK higher education system, the UK Government probably has good reason to maintain this kind of regulatory pressure on institutions: in probably the best-known scandal to hit the sector, the University of Wales was stripped of its status and disbanded in 2011 after a series of scandals involving visas, and evident failure to carry out due diligence on foreign institutions in Malaysia and Thailand which had been allowed to award its degrees and had executives with bogus qualifications. 

All this stands in stark contrast to the situation with respect to financial training. Even though attendees do frequently place certificates issued by financial training companies on their CVs, and despite the fact that the information and techniques gleaned on these courses is every bit as much, if not more, relevant to their careers, financial training courses remain completely unregulated. 

Anyone can set up a financial training company, offer whatever training courses they want, with whatever agendas they wish, seek attendance from anyone – subject to the usual corporate regulations on money laundering, proceeds of crime and similar legislation – and go on to award any certificate they please, provided that they do not call it a ‘degree’ or any other name of regulated qualification is mentioned.

Course content is entirely down to them. There are usually no examinations, with the exception of those courses that are run jointly by Universities and training companies, so it is left to employers and attendees alike – the market – to determine the usefulness of individual courses, the performance of training companies and the future of the entire sector. 

There is some tentative regulation in the form of CPD points. In Ontario, for example, the Law Society there mandates that practitioners must complete in each calendar year at least 12 CPD Hours in ‘Eligible Educational Activities’. The Law Society accredits CPD providers. 

There is a form to fill in to achieve accreditation: but lawyers benefit from training in financial topics that, self-evidently, the Law Society is not qualified to decide upon. Yet there is no independent authority which can authorise CPD applications. The result is a wide range of quality in the provision of CPD courses, as with financial training generally.

Some firms are superbly professional, with trainers that have magnificent CVs stretching back decades and a history of providing financial training that now equally extends back over decades.


But others may not be, and there is little in the way of information for potential delegates to make decisions as to which courses to choose, what benefit they might get from attending one course or another, or how reliable an individual training company may be.

Still less do they have the opportunity to compare all relevant offerings from different providers, and then make a decision between them. As a result, firms must rely on their HR departments and their own employees to navigate a complex and ever-changing market in financial training.

When some of these firms are located in the developing world and spending significant monies in local currency to send their employees to London, in particular, this very much matters.

The time has surely come for the UK, which is the world’s leading destination for financial training, to take the lead and impose a regulatory regime on the training that is producing the very professionals the overall financial services regulatory regime seeks to regulate.


About the author

Julian Roche is course director at Redcliffe Training 


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