Compliance is just the start – firms that invest in people, culture and capability build trust, reduce risk, and stand out.
In part 1 of this short series of blogs, we explored why the current reviews of the SM&CR regimes (CP25/21) isn’t about softening standards, but about making a good regime better – in this follow up, we’re diving into one of the most powerful enablers of effective SM&CR: Training & Competence – and how it works hand-in-hand with Consumer Duty and cultural values to deliver real business benefit and better customer outcomes.
From framework to function: Why T&C is critical
While SM&CR provides the skeleton of accountability, it’s Training & Competence (T&C) that brings it to life.
T&C ensures that people don’t just know their responsibilities – they can live them, ethically, consistently, and confidently. It turns policies into behaviour, and principles into practice.
As CP25/21 proposes more flexibility – for example, in updating Statements of Responsibilities or conducting fitness assessments – the only safe way to use that discretion is by trusting your people.
And trust is earned through rigorous training, regular assessment, and a culture that supports doing the right thing.
The Competent Employee Rule: Still standing strong
Let’s not forget: the Competent Employee Rule (SYSC 5.1.1R) is still very much in force.
It requires firms to ensure their staff are:
- Properly trained
- Competent for their roles
- Supervised to discharge their responsibilities
This isn’t just a tick-box rule – it’s a framework for building high-performing, customer-focused teams. Firms that treat this as a strategic imperative – not a compliance chore – report better outcomes across the board.
T&C, Consumer Duty and Culture: A winning trio
T&C also plays a foundational role in delivering on the Consumer Duty. It prepares individuals to:
- Recognise foreseeable harm
- Support customer goals
- Apply judgement under pressure
- Embed conduct rules into daily decision-making
Together, T&C and Consumer Duty act as cultural anchors. When they’re embedded properly, they help firms foster ethical leadership, long-term thinking, and authentic accountability.
Commercial advantage: Culture and Capability as differentiators
The benefits aren’t just regulatory – they’re commercial.
Firms that invest in training, competence, and values see real gains:
- Better decision-making
- Stronger customer loyalty
- Reduced misconduct and complaints
- Improved retention and staff engagement
- Greater resilience and reputational strength
And in an industry where trust is fragile and reputation is everything, those firms stand out – not just to regulators, but to prospects, customers, partners, and investors.
Final thoughts: Lead with Culture, Win with Competence
T&C is no longer just a back-office requirement. It’s a frontline regulatory tool – and, done well, a strategic asset.
If SM&CR is evolving, so must the way firms embed and deliver T&C. That means placing more emphasis on people, training, and cultural clarity.
Because ultimately, regulation is about more than compliance – it’s about conduct. And conduct starts with competence, character, and culture.
Key takeaways:
- T&C empowers SM&CR – It’s the operational engine behind conduct, accountability, and fitness assessments
- The Competent Employee Rule still matters – and supports cultural as well as technical standards
- Firms that prioritise competence and culture outperform – in risk, customer outcomes, and trust
- T&C, Consumer Duty, and SM&CR are aligned tools – for sustainable, ethical, and successful business models
Missed our first blog in the series? Click here to catch up on why SM&CR still matters and what CP25/21 means for your firm.
Looking for help evolving your governance, culture, or T&C strategy? Click here to get in touch – we’d love to support your journey.