A new approach to training and competence?

Following the announcement by the Financial Conduct Authority (FCA) in December 2025 that it would remove the minimum annual Continuing Professional Development (CPD) requirement, our proposition partner for compliance and learning & development – UKGI Group - explains why some firms are reassessing what training and competence (T&C) should look like in practice. They explore what’s really changed, the impact on firms’ approaches to T&C, and how CPD can still be used to drive competence, value and better outcomes in 2026 and beyond.

CPD: sacrificed for simplification?

Before the FCA’s consultation CP25/12, Simplifying the Insurance Rules, individuals involved in insurance distribution were required to complete a minimum of 15 hours of CPD each year. This requirement stemmed from the EU Insurance Distribution Directive (IDD), which also set out eight core knowledge areas, applied proportionately depending on role. In December 2025, the FCA confirmed in PS25/21 that minimum CPD requirements, along with associated monitoring and record-keeping expectations, would be removed with the eight core knowledge areas becoming guidance rather than a rule. The aim is to reduce regulatory burden and give greater flexibility and proportionality in how training and competence is managed; this also fits with the FCA’s wider drive to simplify regulation and to support growth and competitiveness in the UK economy.

So, what’s really changed?

In regulatory terms, not much. Firms are still required to ensure staff are competent to perform their roles effectively, with obligations embedded in SYSC 28 of the FCA Handbook. Training remains fundamental to meeting those requirements.

What has changed is the removal of the arbitrary 15-hour benchmark that many firms had come to rely on as a proxy for competence. For some, this exposes an uncomfortable reality; training was being measured by hours completed rather than impact achieved. Firms must now think carefully about how they monitor and evidence competence, not just to the regulator, but to consumers. That means showing that training is purposeful, relevant and linked to outcomes, not simply that it took place.

Completing 15 hours of CPD never guaranteed competence; the removal of this measure creates an opportunity to rethink how learning and development genuinely improves skills, knowledge and customer outcomes. For some firms, this will require a broader shift in mindset and culture, whilst still taking into account that the regulator continues to view the eight core competencies as being relevant.

A changing regulatory approach

The FCA’s decision aligns with its broader move to rely on outcomes-based regulation, where the focus is less on procedural compliance and more on whether firms’ actions actually deliver good consumer outcomes.

This approach has not always been easy for firms to implement. The 2024 Insurance multi-firm review of outcomes monitoring under the Consumer Duty found that many firms focused on process completion rather than testing outcomes, reporting metrics with “limited, or no insight” into what those processes revealed or what actions were taken as a result.

The same pattern often appears in CPD. The former 15-hour requirement was frequently treated as a tick-box exercise, with little assessment of whether learning addressed real risks or improved performance. 

As Nisha Arora (FCA Director of Public Policy Priorities) has previously said, the Consumer Duty is not “once and done”. Neither is learning and development. CPD should not be 15 hours and done, nor a repetitive or empty exercise. To align with the spirit of the Duty, training needs to be relevant, measured and responsive.

Using CPD effectively: linking training, competence and value

A joined-up approach is key. Training, competence and value should be seen as interconnected. Targeted, role-specific training builds competent staff, which in turn, deliver value for both firms and consumers.

For example, a software developer in an insurance intermediary may not need deep product knowledge, but they do need to understand consumer needs and Consumer Duty expectations when designing digital journeys. Without that awareness, systems can unintentionally create friction or risk of harm.

Similarly, rising complaints linked to a team or individual may indicate declining value for consumers. Targeted training can address root causes, improve performance and reduce future risk.

T&C isn’t just about compliance, it’s about people. When learning is relevant, practical and clearly linked to development, staff feel supported, confident and invested in. That drives engagement, reduces churn and helps firms build and retain the skills they need for the future, rather than constantly replacing them. Over time, this creates stronger succession planning, reduces key person risk and builds more resilient teams that can adapt to change, manage risk and continue to deliver good outcomes.

Case study: insight into action

A practical example comes from work carried out with a firm supported by UKGI. The firm believed it was managing vulnerability well, having identified very few vulnerable customers. Following staff training on recognising vulnerability, the number of vulnerable customers identified nearly doubled. Vulnerability had always been there; staff simply hadn’t been equipped to spot it. Reviewing outcomes data revealed a clear training gap. Addressing it improved staff competence, encouraged customer disclosure, produced a better insight into the customer experience, and reduced the risk of harm.

Conclusion

We don’t see the removal of the minimum CPD requirement as a lowering of standards. It is an opportunity to rethink how training and competence can genuinely support good outcomes. Firms that adopt a purposeful, outcomes-focused approach to CPD will be better placed to demonstrate competence, deliver fair value and meet regulatory expectations. Done well, CPD becomes more than a regulatory obligation; it becomes a strategic tool for building capability, trust and long-term value.”

_^.