T&C Driving Cultural Change
By Reed Sylvester, Learning and Development Manager, Kleinwort Benson
Kleinwort Benson is the Wealth Management brand of Dresdner Private Wealth Management and a subsidiary organisation of the global financial services organisation, Allianz. Kleinwort Benson undertakes Private Wealth Management, Banking, Fiduciary services and Fund Administration in the UK and Channel Islands.
Kleinwort Benson operates in 3 jurisdictions – UK, Jersey & Guernsey. This means the organisation has 3 separate regulators – Financial Services Authority (FSA) / Jersey Financial Services Commission (JFSC) / Guernsey Financial Services Commission (GFSC); each with their own different rules and guidance on how to operate when dealing with clients.
In the UK, as most of you will know, we have had various forms of Training & Competence (T&C) schemes for a number of years, pre-dating FSA in 2001. However, in the Channel Islands, they do not have a similar concept, relying more on CPD requirements and qualification tables linked to certain roles. However, this year, given the requirements to implement Treating Customers Fairly (TCF) into our UK based operation, Kleinwort Benson felt it made sense for our organisation to implement TCF across the whole region – this supported our business strategy and our company values. This project is ongoing and due for completion by the end of 2008.
Personal Development Scheme
In order to support the concept of TCF, having a smooth running T&C Scheme is vitally important. But given the driver of this (originally) was the FSA; there had never been a need to rollout our T&C Scheme to the Channel Islands. Therefore, this article highlights how we are implementing a T&C Scheme in an environment where there wasn’t a regulatory imperative to do so. However, implementing the scheme this year will mean that the way our client facing staff operate and are supervised will change significantly. One of the great things about Kleinwort Benson’s existing scheme is that we took a decision over 2 years ago to rebrand the Bank’s UK scheme as the Personal Development Scheme (PDS). This means that the reference to T&C has been removed from the scheme and therefore, the semantic link to T&C is now less obvious. This is helping with implementation as it means that there is less of a feeling of the UK forcing rules on the the Channel Islands.
Supporting change
Clearly with any change initiative it is important to have those who are active promoters of the change and having these people in influential positions is always going to be very helpful. Therefore, the first and possibly most important part of this change was senior management engagement. The respective MD’s of both Jersey and Guernsey were engaged as project sponsors. This reinforced the desire to implement the change, and bought in the 2 best promoters of change one could wish for. This, to my mind, would also help those who were uncertain about whether the changes would have a positive impact and therefore, be worth spending the time implementing. You might ask how I got the support so easily… Well, luckily both MD’s already have staff based in the UK who are impacted by our existing PDS, but the main reason was when we talked about the coaching culture and structure that T&C can place around the coaching culture. So rather than coaching being ad-hoc it would mean a structure, guidance about what to do and when and all-important documentation to record progress and therby be better able to measure results from the coaching interventions / PDS.
Interestingly, the MD’s felt so strongly, that this was the right thing to do in order to support TCF implementation, they advised their respective regulators of what we were intending to do, demonstrating their own and the bank’s commitment. Communication of this has been cascaded through the Island’s various management teams again to reaffirm that this change is on it’s way and is supported.
Analysing the needs
Following this, the next step was to undertake an analysis of where we are now in terms of T & C in the Channel Islands and where we want to be. The second part of the equation was already known, i.e. a T & C scheme of the same standard of the UK’s scheme being adapted and implemented in the CI, which fully supports TCF.
One of the very first steps was to identify who would be impacted by the new scheme. In the UK this might be obvious e.g. Investment Advisers, Investment Managers etc. However, for those involved in Private Banking offshore, you will know that the type of business and the type of client contact is quite different, especially when it comes to Trust business. Therefore, I spent time with all of the business heads making sure that we had captured all of the client facing roles, which we felt were appropriate to analyse for inclusion into the main PDS.
To understand ‘where we are now we’ ran a project to do a “roots up” review in terms of recruitment, attaining and maintaining competence, supervising and record keeping to evidence this. This involved gathering a lot of data around the roles that would be impacted and how, reviewing existing processes and procedures, holding interviews, researching JFSC/GFSC requirements. We used several methods for data gathering – some secondary data e.g. written procedures and some primary data e.g. one to one interviews with a cross-section of those undertaking the client facing roles in the Channel Islands.
This analysis took several months, given the amount of data to review, including time to analyse and identify the gaps. Following this a report was produced highlighting the issues identified and what the closure of the gaps would entail. This report has been provided to the MD’s and the Bank’s TCF Steering Group, for feedback.
Following discussion it was decided to progress with the key parts of the UK scheme with some important CI changes to meet the distinct needs of, staff, clients and regulators in the CI. For example, the type of business that KB does in the CI is so wide and varied that we decided to amalgamate some client facing roles, rather than individual roles. For example thre are Channel Island roles where client contact is predominantly over the phone. This presented it’s own challenges in terms of how you assess competence and supervise when there is no face-to-face interaction, which is what the Bank is used to with it’s UK client base.
The current position
Following the redesign of the scheme, engagement is important. Therefore, we are holding forums for all of those staff impacted by the implementation, during late Q3 / early Q4, to demonstrate how the scheme will assist them in recruiting, inducting and demonstrating ongoing competence and therefore helping the bank to demonstrate that it treats all of its clients fairly, no matter which part of Kleinwort Benson they deal with. We will also look at coaching and the structure that will support this and what the staff and supervisors will see as a result of implementing these changes. As part of the workshop we will use existing staff and supervisors from the UK who will be able to give real-life examples of how working through the PDS has enabled them to improve performance.
Learning points
The key learning for the bank and me has been engagement with the key stakeholders at every step. Without continual engagement the implementation of the scheme would be more difficult given it is such a significant change to the way we work in the Channel Islands at a procedural but even more significantly on a cultural level.
Also, we all see various initiatives come from govenring bodies, regulators etc. and rather than seeing them sometimes as tools to make it more difficult for us to do business, think about how the inititative can be used as a positive message. For example, altering the way that the T&C scheme is perceived (as a regulator’s initiative) and employing it as a personal development support tool.
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London, September 1st 2008
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