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Delegating work in an SMCR-compliant way

In our last article, we looked at what the rules say on delegating work and activities under the senior managers and certification regime (SM&CR).

Delegating work in an SMCR-compliant way

12 Mar 2020

Graeme Stewart

In our last article, we looked at what the rules say on delegating work and activities under the senior managers and certification regime (SM&CR). 

We'll now look at delegating work to the right people, and provide some best practice examples around how to approach delegation more generally. 

Choosing the right person to carry out any delegated task might seem like common sense, but don’t take for granted that this is the case in your business.

For example, we find many firms don’t regularly review their locum arrangements to make sure the person nominated in the absence of a specialist adviser remains suitable for that role.

This is particularly relevant to defined benefit transfer business, where many firms have changed their permissions or their business focus in recent months.

Making sure the right person or external resource is in place is critical here, and no decision should be taken lightly.

Delegation in practice

Let's say there's a senior manager who wants to delegate tasks relating to the firm’s policies and procedures to counter the risk the firm might be used to further financial crime.

The manager will continue to write the money laundering reporting officer annual report, and to report suspicious activities to the National Crime Agency.

Two tasks have been delegated as it's been identified that the manager's time to develop and deliver these would be better spent elsewhere. 

These are:

  • A thematic file review exercise looking at the firm's mortgage advice process to identify any shortfalls and if the firm may be at risk of being used for mortgage fraud
  • Training advisers on the firm's anti-money laundering procedures.
After looking at exactly what's involved and the estimated time and resources needed it's decided:

- A third-party compliance support firm will carry out a thematic review of the identified mortgage files.

Following due diligence, the senior manager notes conversations held with the third-party to evidence exactly what the review will look like.

He also notes how the findings will be assessed against the procedures in place, and how any perceived deficiencies will be presented.

A further file note is made that the person completing the review is experienced, competent and qualified to carry out the task.

- The training of all advisers will be completed by a senior adviser.

This person has the continuing professional development (CPD) records showing their knowledge is up to date and that they have the right skills, knowledge and experience to deliver a short presentation and set a knowledge assessment.

It's agreed the evidence to be kept will be the presentation itself, the test paper answers, and advisers will record the training on their training plan and CPD records.

Overall, it's worth taking the time to consider all the options and resources available before deciding the right person to delegate any task(s) to.  

Don’t assume that what’s in place remains suitable forever, and regularly review this.

What does good look like?

If the business case is to delegate a task, what will a positive outcome look like?

It's worth using SMART principles to define this:

Specific – The specific task(s) should be described in detail
Measurable – The firm must be able to evidence the task has been completed
Assigned – Who will carry out the task, along with who will oversee it, should be made clear
Result required – What good looks like should be described in detail
Timeframe – The timeframe to complete the task should be specified.

Let's take another example.

A firm decides to carry out further training on complaints handling. 

A poor approach to delegating this task might be: "Y will carry out the training to all staff regarding our complaints handling procedures."

A good example of a project plan could look like this:

X senior manager has delegated the following task to Y.

Specific

Y will complete (for all staff falling under the code of conduct rules) a training session on the firm's internal complaints procedures. This will include:

  • Why this issue has been identified as a group training need, and how this should be evidenced on everyone’s training plans
  • The definition of a complaint
  • How the firm may receive a complaint
  • What staff should listen out for when listening to potential complaints
  • The dos and don’ts that staff should follow when dealing with a potential complaint
  • Who and how staff should refer the complaint to and the timeframe
  • A summary of what X will do to address the complaint received
Following a powerpoint presentation, there will be a multiple choice questionnaire based on the above points with the pass rate set at 100 per cent.

There will be a further presentation for those not reaching the pass mark on the failed question/s, so any knowledge gaps are fully addressed. 

Measurable

One week after the training, each attendee will be able to show CPD records with a clear reflective statement to evidence their training need has been met at this time.

Assigned

Y will draft the presentation and assessment questions, and X will review the material and listen to a dry run of the presentation.

X will check that the questions are fair and reflect the subject matter covered.

Result required

Each attendee will have recorded that they have a training need to understand their role and responsibilities under the code of conduct rules in respect of complaints.

Each person will have been able to hear about and question the firm’s complaints process, and will have evidence they passed a knowledge assessment.

Timeframe

Set out the dates to complete the presentation and assessment drafts, and when this will be reviewed and approved by. 

Then outline when the training will be carried out, and when a sample of training plans and CPD records will be checked.

Also note a 'no later than' date when the project will be reviewed and closed, and when directors will be advised the project has been successfully completed. 

Some final thoughts

When delegating, take time to review your SMART action plan, and get a second opinion from a colleague. 

It may take a lot of effort to describe what good looks like, but this will be paid back with successful outcomes. 

Remember, not everything is going to be right first time, and bear in mind the rules say that 'reasonable steps' should be taken. They don’t say that human error can't occur.

If an outcome isn’t quite as expected, was this because the tasks wasn’t properly described, or because the person selected was the wrong choice (for whatever reason)?

Look honestly for an answer, without holding a witch hunt.

It's the way of the world that a good business will involve senior managers delegating their work from time to time. 

Hopefully this has given you some ideas around the best practices to adopt.