Chapter 2

Question 1

How does a manager benefit the business?

Answer 1

1. Supporting CD requirements by delivering good consumer outcomes. (e.g., by reviewing the standard of advice, observing employees).
2. Helping to meet FCA requirements & manage risk.
3. Managing people and resources to focus on the needs of customers and the business.
4. Managing information and taking relevant action.

Question 2

Activities of a manager (day to day stuff)

Answer 2

Workplace coaching
Providing feedback
Training
Performance management/ appraisals
Briefings
Team meetings
Monitoring performance standards
Contributing to a positive work culture
Collating and/or assessing relevant management information (MI)
Budgeting (potentially)

Question 3

Manager high level competencies (4)

Answer 3

1. Working with others
   Customer focus
   People focus
   Building understanding & trust
   Influencing skills
2. Creating solutions
   Seeking information
   Understanding issues
   Problem solving
3. Managing the team
   Leadership
   Communication
   Maintaining compliance standards
   Managing performance
   Developing and coaching others
4. Personal effectiveness
   Striving for excellence
   Taking initiative
   Maintaining & developing knowledge and skills

Question 4

Role of the manager (2)

Answer 4

Ensure company standards are met
Improve individual and overall performance

Question 5

Span of control - factors to consider

Answer 5

1. Experience of the manager
2. Experience of the employees
3. Geography - bigger the spread, the lower the number that can be managed effectively.
4. Managers’ other responsibilities
5. The degree of risk or importance associated with the role.

Question 6

Responsibility maps

Answer 6

• In SMCR firms
• Detail reporting lines
• Clearly show responsibilities of the individuals
• Name the individual in each role
• State whether the role is certified or SMF
• Include SMF roles & key roles in compliance, IT, HR & legal.

Question 7

Three lines model for risk management

Answer 7

1st line roles characteristics = Focused on the provision of products / services to clients
Responsible for managing their risks.
Closest to the client & usually most able to respond if problems arise.
Follow clear procedures and processes.
Should have clear targets and strategies.
Specialist risk staff embedded within business units.

2nd line role characteristics
Comprises the functions that monitor the 1st line
Often a centralised business function in a large organisation or 3rd party external provider for smaller firms.
Provide expertise, support and monitoring.
Challenge on risk related matters.

3rd line roles
Responsible for auditing the 1st & 2nd lines
Provide independent assurance to governing body.

Question 8

Three lines model for risk management

Answer 8

1st line roles characteristics = Focused on the provision of products / services to clients
Responsible for managing their risks.
Closest to the client & usually most able to respond if problems arise.
Follow clear procedures and processes.
Should have clear targets and strategies.
Specialist risk staff embedded within business units.

2nd line role characteristics
Comprises the functions that monitor the 1st line
Often a centralised business function in a large organisation or 3rd party external provider for smaller firms.
Provide expertise, support and monitoring.
Challenge on risk related matters.

3rd line roles
Responsible for auditing the 1st & 2nd lines
Provide independent assurance to governing body.

Question 9

Talent management

Answer 9

Identification, development, and retention of key employees or those who have significant future potential.

Managers likely to:
Give them exposure to a wider range of roles or
support development through training, qualifications, and mentoring.

Question 10

Describe a risk based approach to supervision (3 statements)

Answer 10

1. A risk based approach means the supervision is tailored to the level of risk identified.
2. Not everyone is treated the same way.
3. Resources are focused on the people and areas that are needed the most

Question 11

Typical monitoring/ supervisory regime for pre competent or underperforming individual

Answer 11

Role play/ observed meeting- quarterly

KPIs - monthly

Knowledge tests - quarterly

1-2-1s - weekly or monthly

File reviews - 100%

Question 12

Typical monitoring/ supervisory regime for competent advisers advising in low risk areas

Answer 12

Role play/ observed meeting - annually

KPIs - quarterly

Knowledge tests/ CPD - annually

1-2-1s - quarterly

File reviews - 10%