Training & Competency for Sole Trader Mortgage Brokers: What the FCA Really Expects

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Do Sole Trader Mortgage Brokers Need a Training & Competency Scheme? (Yes – Here’s Why)

“It’s just me. I don’t employ advisers, so I don’t really need a Training & Competency scheme… do I?”

It’s one of the most common questions we hear from directly authorised mortgage brokers. The answer is simple: yes, you do.

Many brokers think Training & Competency (T&C) only applies to firms with employed advisers, supervisors and large compliance teams. In reality, the FCA expects every regulated firm to ensure that anyone giving advice remains competent to do so—even if that person is also the business owner.

The good news? If you’re a sole trader, your T&C arrangements don’t need to be complicated. They just need to be proportionate, documented and capable of demonstrating that you’re maintaining your knowledge and delivering good customer outcomes. In this guide we’ll explain:

  • Does a sole trader actually need a T&C scheme?
  • What does the FCA expect to see?
  • How can you evidence your competence?
  • What are the most common mistakes?
  • Why independent file reviews can strengthen your compliance.

Do Sole Traders Need a Training & Competency Scheme?

In short… yes.

Although the FCA doesn’t prescribe exactly how your T&C arrangements should look, it does expect firms to ensure advisers have the appropriate knowledge, skills and experience to perform their role. When you’re the only adviser in the business, you’re effectively wearing two hats.

You’re responsible for:

  • Providing suitable mortgage advice.
  • Monitoring your own competence.
  • Identifying training needs.
  • Keeping your knowledge up to date.
  • Demonstrating that you’re continuing to meet regulatory expectations.

The fact you don’t supervise staff doesn’t remove those responsibilities.

What Does the FCA Expect?

The FCA isn’t expecting a 200-page Training & Competency manual. Instead, it wants evidence that you actively manage your professional competence. That means being able to demonstrate that you:

  • Complete regular CPD.
  • Keep up with regulatory changes.
  • Understand lender and market developments.
  • Review the quality of your advice.
  • Learn from mistakes.
  • Take action where improvements are identified.

If an FCA supervisor asked, “How do you know you’re still competent to advise clients?”

…you should be able to answer with evidence rather than opinion.

What Should Your T&C Records Include?

A simple but effective Training & Competency file should normally include:

A Training & Competency Policy

A short document explaining:

  • How competence is maintained.
  • How often it is reviewed.
  • How training needs are identified.
  • What records are kept.

It doesn’t need to be written for a firm with 200 advisers. It needs to reflect your business.

A CPD Log

Record both formal and informal learning, including:

  • Lender training.
  • FCA updates.
  • Compliance webinars.
  • Industry events.
  • Structured reading.
  • Consumer Duty learning.
  • Product updates.

More importantly… Record what changed because of the learning. Reflective CPD carries much greater weight than simply recording hours.

Regular File Reviews

Competence isn’t measured by how much training you attend. It’s measured by the quality of the advice you provide.

Regular file reviews should consider:

  • Suitability.
  • Fact finding.
  • Affordability.
  • Documentation.
  • Advice rationale.
  • Consumer Duty.
  • Record keeping.

Good file reviews should identify learning—not just compliance failures.

Annual Competency Review

Once each year, take a step back and review your overall competence.

Ask yourself:

  • Have I completed sufficient CPD?
  • Have any themes appeared in my file reviews?
  • Have I received complaints or recurring customer feedback?
  • What has changed in regulation?
  • What training do I need over the next 12 months?

Documenting this review shows competence is being actively managed rather than assumed.

Consumer Duty Has Raised the Bar

Consumer Duty isn’t a separate compliance exercise. It has reinforced the importance of advisers being able to demonstrate that they have the skills and knowledge to consistently deliver good outcomes.

Training should therefore cover areas such as:

  • Vulnerable customers.
  • Products and markets.
  • Regulatory developments.
  • Communication skills.
  • Identifying customer needs.
  • Fair value.
  • Ongoing competence.

Ultimately, your training should improve customer outcomes—not simply satisfy a CPD requirement.

The Problem With Marking Your Own Homework

Most sole traders naturally review their own advice. There’s nothing wrong with that, the difficulty is objectivity. It’s surprisingly easy to miss recurring themes when reviewing your own files because you’re already familiar with your own advice process.

An independent reviewer often spots trends that you simply wouldn’t identify yourself.

Why Independent File Reviews Make Sense

External compliance support isn’t just about preparing for an FCA visit.

It provides:

  • Independent assessment.
  • Constructive feedback.
  • Identification of recurring issues.
  • Practical recommendations.
  • Evidence of objective oversight.

For sole traders, that’s particularly valuable because it demonstrates your competence is being assessed independently rather than relying solely on self-certification. It’s less about “checking up” on your business and more about giving you confidence that your advice stands up to scrutiny.

Common Mistakes We See

Before reviewing your Training & Competency arrangements, check you haven’t fallen into these traps:

❌ Assuming T&C doesn’t apply because you’re a sole trader.

❌ Recording CPD hours without recording learning outcomes.

❌ Never reviewing completed advice files.

❌ Having no documented competency assessment.

❌ Completing training but never changing anything as a result.

❌ Waiting until FCA correspondence arrives before reviewing competence.

❌ Treating T&C as paperwork rather than part of delivering good customer outcomes.

Final Checklist

Ask yourself:

✔ Do I have a documented Training & Competency policy?

✔ Can I evidence my CPD?

✔ Do I record what I’ve actually learned?

✔ Are my advice files reviewed regularly?

✔ Have I documented my annual competency review?

✔ Can I evidence my understanding of Consumer Duty?

✔ Would I be comfortable showing my T&C records to the FCA tomorrow?

If any of those answers are “no”, it’s probably time to strengthen your arrangements.

Final Thoughts

Being a sole trader doesn’t reduce your regulatory responsibilities—it simply changes how you demonstrate them.

The FCA isn’t expecting complex procedures or layers of management oversight. It expects a proportionate approach that reflects the size of your business and provides clear evidence that you remain competent to advise clients.

For many brokers, the biggest gap isn’t the quality of their advice—it’s the lack of documented evidence to support it.

At H3 Consultancy, we regularly help directly authorised mortgage brokers review their Training & Competency arrangements through independent file reviews, competency assessments and practical compliance support. An independent review doesn’t just help identify opportunities for improvement; it also provides valuable evidence that your competence has been assessed objectively—something that’s difficult to achieve when you’re reviewing your own work.

After all, when it comes to compliance, sometimes the best person to tell you you’re doing a good job is someone who doesn’t work for you.