FCA Training and Competence Scheme Explained

The FCA's Training and Competence scheme (the TC sourcebook in the FCA Handbook) is the set of rules that says how a regulated firm must make sure its staff are competent to carry out certain retail financial activities. In short: a firm must assess each employee as competent before treating them as such, supervise them until then, make sure they hold an appropriate qualification where one is required, keep their competence up to date, and keep records. It applies to FCA-regulated firms across the UK.

This guide explains the scheme as a whole. For the specific rules on adviser CPD hours, see our guide to FCA CPD for advisers. For which qualifications count, see appropriate qualifications for retail investment advisers. The rules below reflect the FCA Handbook pages as read on 15 October 2026; TC 2 was shown as last updated on 6 April 2026.

What the TC sourcebook is for

According to the FCA Handbook (TC 1.1.3G), the competent employees rule is the main requirement on employee competence, and TC supports the FCA's supervision by adding to that rule for retail activities. The competent employees rule itself is SYSC 5.1.1R: a firm must employ personnel with the skills, knowledge and expertise necessary for the responsibilities allocated to them.

The Handbook defines competence (TC 1.1.4G) as having the skills, knowledge and expertise needed to discharge the responsibilities of an employee's role, including a good standard of ethical behaviour. So the scheme is not only about passing exams.

Who the scheme applies to

Under TC 1.1.1R, the sourcebook applies to a firm where its employee carries on an activity listed in TC Appendix 1 for retail clients, customers or consumers, subject to the limitations in TC Appendix 3. It is therefore about the activity an individual performs, not their job title. The Handbook modifies the application for MiFID investment firms (through TC 4.1) and for firms carrying on insurance distribution activities (through TC 4.2).

TC Appendix 1 lists the activities. Some carry a qualification requirement and some do not. Examples from the Handbook table:

Even where no qualification is required, the firm still has the general duty to make sure staff are competent. For territorial scope, TC 1.1.2R points to TC Appendix 2.

The main stages of the scheme

1. Assessing competence

TC 2.1.1R says a firm must not assess an employee as competent for a TC Appendix 1 activity until the employee has demonstrated the necessary competence and, where a qualification is required, has passed each module of an appropriate qualification. The assessment does not have to be completed before the employee starts the activity, which is why supervision matters.

2. Supervision

TC 2.1.2R says a firm must not let an employee carry on a TC Appendix 1 activity without appropriate supervision. The guidance (TC 2.1.3G) says supervision should be much more intensive before someone is assessed as competent, and that firms should have clear criteria for when that point is reached. TC 2.1.4G adds that supervisors and assessors should have coaching and assessment skills, technical knowledge and experience.

There is one hard rule on supervisors. Under TC 2.1.5R, where an employee is not yet assessed as competent and gives personal recommendations on retail investment products, advises on peer-to-peer agreements, or acts as a pension transfer specialist, the supervising individual must hold an appropriate qualification.

3. Qualifications and time limits

Where an activity needs a qualification, the employee must attain the relevant regulatory module of an appropriate qualification before carrying on the activity (TC 2.1.6R, for activities other than overseeing ones). The full list of appropriate qualifications is in TC Appendix 4.

TC 2.2A.1R sets a time limit: for a non-overseeing activity in TC Appendix 1, the firm must make sure the employee attains an appropriate qualification within 48 months of starting the activity, and must record the start date. Time on the activity is added up across separate periods of employment, and a continuous absence of 60 business days or more is disregarded (TC 2.2A.2R). If the employee does not qualify in time, the firm must stop them carrying on the activity until they do (TC 2.2A.3R). The guidance (TC 2.2A.4G) allows firms to set earlier deadlines or limit the number of attempts.

4. Maintaining competence

TC 2.1.12R requires a firm to review its employees' competence regularly and frequently, and to take action to keep them competent for their role. The guidance says firms should assess training needs at the outset and at regular intervals, including when roles change (TC 2.1.11G). It also says maintaining competence should take in technical knowledge and its application, skills and expertise, and changes in the market, products, legislation and regulation (TC 2.1.13G). Firms may choose to set up their own training and competence scheme (TC 2.1.14G).

5. CPD for certain roles

Two roles have specific CPD rules in TC 2.1. A retail investment adviser must complete at least 35 hours of appropriate CPD in each 12-month period (TC 2.1.15R), with guidance that at least 21 hours should be structured. A pension transfer specialist must complete at least 15 hours of appropriate CPD in each 12-month period, of which at least 9 hours must be structured and at least 5 hours must come from an external independent provider (TC 2.1.23A R and 2.1.23BG). Our adviser CPD guide covers the 35-hour rule in detail.

6. Records, declarations and verification

TC 2.1.24R requires firms to keep records of the CPD completed by retail investment advisers and pension transfer specialists, and of any CPD suspensions and the reasons. Firms must not stop these individuals getting copies of their own records (TC 2.1.25R). For retail investment advisers there are further steps: a written annual declaration covering compliance with APER or COCON and, where applicable, CPD (TC 2.1.26R), independent verification by an accredited body (TC 2.1.27R), and notification to the FCA of certain significant events (TC 2.1.31R). The verification guidance (TC 2.1.29G) says this would usually be a statement of professional standing.

For qualification time limits, TC 2.2A.6 requires the start date to be recorded and says firms should keep records of when each qualification was attained, supporting the general record-keeping rule in TC 3.1.1R.

Quick reference

Targeted support

According to TC 2.1.8B G (effective 6 April 2026), there are no qualification requirements for employees involved in providing targeted support services, and TC Appendix 1 lists targeted support (activity 1A) as having no qualification requirement. The general duty to make sure staff are competent still applies.

Practical steps for firms

• Map every role to the TC Appendix 1 activities it performs, so you know which people are in scope.
• Record the start date of each in-scope activity, because the 48-month clock depends on it.
• Name the supervisor for each person not yet assessed as competent, and check that the supervisor holds a qualification where TC 2.1.5R requires it.
• Keep adviser and pension transfer specialist CPD records where the firm can produce them. A simple training matrix helps with this.

Frequently asked questions

Is the Training and Competence scheme the same as CPD?

No. CPD is one part of maintaining competence. The scheme also covers assessment, supervision, qualifications and record keeping. Specific CPD hours are set in TC 2.1 for retail investment advisers and pension transfer specialists.

Does it apply to every FCA-regulated firm?

It applies to firms whose employees carry on a TC Appendix 1 activity for retail clients, customers or consumers, subject to the limitations in TC Appendix 3. Other firms are still subject to the competent employees rule in SYSC 5.1.1R.

Can someone start work before they are assessed as competent?

Yes, under supervision. TC 2.1.1R does not require the assessment to be completed before the employee starts the activity, but TC 2.1.2R requires appropriate supervision, and where a qualification is needed the regulatory module must be attained before starting (TC 2.1.6R).

How long does an employee have to get a qualification?

For a non-overseeing activity in TC Appendix 1, the firm must make sure the employee attains an appropriate qualification within 48 months of starting the activity (TC 2.2A.1R). Firms may set shorter deadlines.

Bringing it together

The scheme is a cycle: assess, supervise, qualify, maintain, record. Documenting each step makes it easier to show the FCA that your people are competent. For more on professional development, see the Learnsignal CPD hub.

This article is general information about the FCA Handbook, not regulatory, legal or compliance advice. Check the current Handbook and take advice from your compliance team or a qualified adviser before relying on it.