The Model Office Blog

The SMCR and Emotional Intelligence–Model Office-MO Key 5: Your People

[fa icon="calendar"] Nov 24, 2017 4:07:37 PM / by Chris Davies

MO’s 5 keys act as your compliance and professional development foundations so you can map and self-audit your journey as a professional practice, to ensure you not only meet the regulatory rules: TCF, KYC, Suitability, MiFIDII, GDPR, SMCR but also benchmark against the FCA papers and good outcomes they covet and also track performance against your peers.

In this final blog in our series on the 5 MO keys we focus on the Your People key, which assesses your leadership, employees engagement, management and talent management strategies along with meeting the regulatory requirements around the APER and SMCR regimes.

Your people is structured into 12 business functions:

Organisational structure

  • Organogram: Not matter how small or large you are as a business its helpful to draw up an organisational chart with individuals appropriate titles, ensure all staff (In or outsourced) are in the right positions with right skills, appropriate staff ratios are in place

Position descriptions

  • Clarity: One of The SMCR’s focus is on accountability so documented position descriptions are useful for every role in the business and ensure that they are accurate and known and used by all staff. This can help with delegating the right tasks and activities to the right people


  • Uniform process: An effective recruitment process that is documented and used when recruiting new staff is essential and involves the use of screening and diagnostic assessment tools such as aptitude tests, personality tests and skills/competency tests, standardised interview guides and use of behavioural-based interview techniques

Induction programme

  • Standardised: A documented programme is helpful to ensure uniformity across all staff roles and showcases the firm’s culture

Performance management

  • Systemised process: Standardised and documented process for all staff is required here, involving review meetings each year or more frequently, professional development plans and the setting and tracking of key performance indicators (KPIs) at regular intervals each year linked to the business plan. This ensures motivated and engaged employees, skill advancement and identifies future leaders

Staff learning and development programme

  • Holistic structure: Specific and tailored process for all staff that effectively ensures skills and professional standards are maintained at all times while optimising staff engagement. This needs to meet relevant Continued Professional Development (CPD) and Statement of Professional Standing (SPS) requirements. PS Note the new CPD requirement for 15 structured hours of protection based training.

Reward and recognition

  • Engagement: Behaviour economics shows us that people react well to personalised rewards and recognition. This doesn’t just have to be monetary and effectively drives staff engagement and productivity


  • Promote engaged staff: Analysis of who is at risk of resigning and strategy to retain them (if desired) is crucial for business growth and aligning risks, driving mitigation strategies, acting on evolving plans in response to changing market conditions and business needs also needs to be factored in to attracting and retaining the right people

Compensation and benefits

  • Financial and social norms: As per reward and recognition, a strategy to balance financial and social compensation by understanding what motivates employees and staff is a powerful strategy to retain and attract the right people. For example some businesses offer extended holidays or meals in a favourite restaurant as recognition for performance.


  • Benchmark behavioural and technical skills: Agreed and desired role behaviours and skills that appropriate for the performance level required need to be aligned to the firm’s business plan

Conduct rules

1st Tier individual conduct rules

Rule 1



Rule 2

Due skill, care and diligence


Rule 3

Comms with FCA/PRA/Regulators


Rule 4

Customer interests and TCF

FCA only

Rule 5

Standards of market conduct

FCA only

 The new conduct rules are clearly based on the previous rules for individuals in APER (and also, to a lesser extent, the Principles for Businesses (PRIN) aimed at firms). 

The main difference between the new rules and APER is the greatly increased scope of the former (see table)

What does the new extended regime mean for you?

Firms must all follow the five conduct rules. Senior managers also need to follow the four additional rules. Personal accountability is thus an increasing area of focus.

Staff feedback

  • Uniform communication channels: Formal process for collecting and responding to staff feedback that effectively drives engagement and productivity can be powerful, for instance using social enterprise technology such as Yammer can identify talent and encourage idea sharing


  • Code of best practice: Relevant staff belonging to professional bodies and processes should be in place to ensure codes of practice are understood and followed
  • Soft skills: Communication and questioning techniques are aligned for client meetings to ensure behavioural coaching to ensure empathy, soft facts are covered, emotional insurance is provided and client informed consent received. Referral training provided to ensure service advocacy. Chairing, Presentation, influencing, negotiation and conflict resolution skills training is available.

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Topics: Benchmark, compliance, client centric, Financial regulation, Financial business development, fintech, client engagement, regtech, Constructive compliance, Risk management, practice management, FCA, advice, suitability, FAMR, MiFIDII, SMCR, Data, Systems and controls

Chris Davies

Written by Chris Davies

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