When you read the words ‘Continuing Professional Development’, what comes to your mind?
Perhaps, an exasperated sigh as it comes as a reminder to you that you need to record your most recent CPD. Or perhaps it even acts as a prompt to remind you that you’re a few hours behind and need to prioritise some time soon to get up to speed. But having these initial thoughts, did you consider the type of CPD? And even more specifically, did you consider your requirements under the Insurance Distribution Directive (IDD)?
After looking through our fit and proper documents, it has become apparent how many individuals involved in the distribution of insurance are unaware that their usual 35 hours of CPD needs to include 15 hours-worth of protection specific CPD. Or if they are aware, they’re not prioritising it and scraping the hours together at the end of their CPD year.
The 15-hour requirement is meant for anyone involved in insurance distribution. The Directive views those involved to be far-reaching, from those advising to those assisting in the administration of the contracts. The importance of CPD is paramount, as it will enable an individual to show that they are well versed in both product knowledge and being able to establish the right advice for clients, no matter which link in the chain they are.
The IDD, which came into force October 2018, aimed to synchronise the regulation of insurance in the single European market whilst refining consumer protection standards. The EU authorities passed this law as they wanted to strengthen the confidence of customers in insurance, which built on the pre-existing Insurance Mediation Directive (IMD 2005) which only covered brokers. Through the IDD, the minimum standards are expanded to insurance companies and emphasise a focus on training, product governance and customer information.
Ultimately, it requires firms to act honestly, fairly, and professionally in the customer’s best interests, much like the FCA’s core objectives, and it applies to all insurance products. This includes protection, insurance-based investment products and general investment.
An individual involved in the distribution of insurance must have sufficient knowledge of the following:
- Products being sold.
- Customer needs.
- The market.
- Alternative benefits available from employers and the government where relevant.
As well as maintaining your knowledge in the areas listed above, you also need to keep a record of what you have undergone to obtain such knowledge. This is where the 15 hours of protection specific CPD comes into play. Although 15 hours does not feel like a significant amount, it sure can feel cumbersome when you have a busy schedule, and you do not dedicate sufficient time for your CPD.
For the majority of retail advisers, 35 hours is the minimum amount of CPD required on a 12-month basis. The required number of hours can be achieved through proactive attendance of seminars, webinars and workshops which all constitute as an example towards structured CPD. Alongside your structured CPD, 14 hours of your learning can come from unstructured means, such as reading articles and publications.
So, why are we still talking about this four years after the implementation of the Directive? A surprising number of individuals in finance still don’t realise they need to focus on protection in their CPD. Perhaps there has been a lack of awareness raised in the past, but this will not be excusable when the professional bodies come knocking.
CPD doesn’t have to be a chore, so here are some insightful tips and tricks to help keep you on track of your hours:
- Little and often is key- this will prevent you from having to cram hours of CPD on the day before your SPS renewal.
- Take on CPD relevant to your development, don’t view it as a tick-box exercise
- Remember: Exams count towards CPD.
- Change it up a bit- it can be monotonous reading article after article, so get involved in some workshops and seminars to help stimulate your mind.
- Make sure you record your CPD straight after you do it. Prove you have truly understood the learning incomes.
- Check out our events calendar – it’s full of handy workshops and webinars to help you keep your CPD topped up!