UK finance firms strengthen training ahead of FCA’s misconduct reforms

As you may recall, the Financial Conduct Authority confirmed its misconduct reforms back in December, with changes taking effect on 1 September 2026. In the months since, attention has turned to how firms apply those rules in practice as that date approaches.

For HR teams, that brings a clear priority. Training needs to move beyond policy awareness and reflect the real-world judgement calls managers face when handling misconduct. That means looking again at how people are trained to recognise issues, escalate concerns, and respond appropriately when behaviour crosses the line into something that may carry regulatory consequences. We’ll speak to our Head of Client Training about that. 

At a high level, the FCA is not prescribing a single approach. But it does expect firms to ensure staff and managers understand how the Conduct Rules apply to serious misconduct, including bullying and harassment. That creates a challenge for HR. Traditional compliance training, often delivered through standard e-learning, may not be enough to prepare managers for the kind of judgement calls these cases involve.

There is also a need for a more joined-up approach. Misconduct of this kind sits across HR, Legal and Compliance, and firms need to ensure those functions are aligned in how issues are identified, assessed, and escalated. Ultimately, this comes down to how well managers are equipped in practice to recognise issues and make the right calls.

So what should that training now look like? Earlier I caught up with our Head of Client Training, Trish Embley. I put it to Trish that for most firms the type of training they offer will need to change:

Trish Embley: “Yes that’s right. I think it’s the quality of the training that needs to be explored. If we think historically about compliance training, money laundering etcetera, a lot of that is done by the sort of click, click, click through e learning whereas because this is more to do with what's at the heart of this requirement for training which is cultural change, and behavioural change. That's not going to be achieved successfully, we believe, through your traditional e learning. So what the FCA are looking for is the sort of training that involves scenarios where people have got to make difficult judgment calls, tricky decisions, case studies, and there's a mention of role play as well which I know a lot of people don't like because they don't like acting but that's where, when traditionally we have done this sort of training, we can involve actors and then all the manager or the employee attending has to do is be themselves and respond in a way that they would in a workplace.”

Joe Glavina: “It sounds like this is not only about staff behaving properly, Trish, but also about spotting issues and knowing what to do. Is that right?” 

Trish Embley: “Yes, it is really. They are driving home the point that many of these organisations will be running DEI initiatives, running Respect at Work programmes. Some people engage with that more than others but they're really upping the ante here by saying, look, this behaviour is not just inappropriate and unacceptable in terms of our values and our respect to work policy, you are in breach of your regulator’s code of conduct. This is on the same sort of level as things like money laundering. So it's really driving home how serious this is and therefore how it should be prioritized in terms of managers, for example, preventing this happening, responding certainly to it, but really encouraging reporting as well as they would with any other regulatory issue.”

Joe Glavina: “A lot of managers might roll their eyes and think this is just HR going off on one, but this is potentially career limiting isn’t it?”

Trish Embley: “Oh, absolutely and that, I think, is something that needs to be really emphasised because, of course, it will be something that would be required to be reported in regulatory references. So, this can really affect someone's ongoing career. Also, we're putting this sort of training on a par with other qualification training that would have to be done, and there's have to be records showing that people have completed it, they'd been assessed and it's ongoing. It's an ongoing part of continuous professional development. So again, thinking about this sort of training the same way as you would have any other sort of qualification that you would have to complete in the FS sector.”

Joe Glavina: “This is coming into force on 1 September. Are there any actions that firms should be taking now ahead of those changes such as auditing training to see if it’s in line with what the FCA is expecting?”

Trish Embley: “Yes absolutely. Audit your existing training, see how it needs to be enhanced, or added to, and get that joined up approach. So it may be that whether it's the EDI team, or HR, they have operated this training in a silo, it's reaching out to Legal and Risk and Compliance to make sure, as I say, everybody's on the same page so you don't end up with, you know, different sort of HR disciplinary outcomes to a decision that, say, a Risk and Legal panel might make on the regulatory issues,” 

With the 1 September 2026 deadline approaching, firms are reviewing how they train managers to handle misconduct in practice and make difficult judgement calls. If that’s something you’re working through, Trish and her team can help. Her details are on the screen. Alternatively, you can contact your usual Pinsent Masons adviser.

- Link to FCA policy statement: Tackling non-financial misconduct in financial services