Professional services firms, particularly the Big Four,
are recognised leaders in the training and professional development
they provide to staff. Nicola Maher, editor of PBI’s
sister publication The Accountant, finds out what the
private banking industry can learn from accountants.
Training takes profit off the bottom line, which is why
many private banks have traditionally underinvested in it. The
accounting profession has a different view. There, continuing
professional development (CPD) training is particularly well
budgeted, resourced and regulated – chiefly because the risks
associated with not ensuring proper training are so great. It
prompts the question, what can accountants teach private bankers
The Accountant’s research
(see charts) found annual training budgets at Big Four
firms (PwC, Deloitte, KPMG and Ernst & Young) ran into millions
of dollars. About 60% of respondents at smaller firms, with
1-100staff) spent $5,000 to $30,000 per year on training.
This is substantially higher than
similar-sized organisations in the private banking industry.
Deloitte UK alone spent more than
£25m ($40m) in the past year on training. Deloitte’s global head of
audit learning Ann Kilbride says while information on training
costs is not collated at a network level, across the industry,
investment in training could be in the hundreds of millions.
This investment is not limited to the UK. KPMG South Africa
learning and development director Heidi Volschenk says KPMG South
Africa spends about $1,425 per employee per year. Ernst & Young
Asia-Pacific people leader Bin Wolfe says the network globally
spends about 1.3% of its total net revenue. Just in the
Asia-Pacific, this equates to more than $22m a year, which covers
internal education expenses and external education expenses
(including travelling expenses).
Wolfe says CPD is an integral part
of the firm’s quality and risk management strategy.
“Ensuring our staff maintain their
capability and the currency of their knowledge and skills ensures
that we minimise the risk of overlooking a significant accounting,
auditing, tax, advisory or transaction issue,” Wolfe notes.
Firms not only invest huge sums of
money in training their staff, they also invest in the resources to
do so. Across the profession the majority of training is provided
onsite and developed and instructed by the firm’s own
Many of the Big Four and larger
mid-tier accounting firms have also invested in dedicated training
centres. Deloitte US spent $300m on the Deloitte University, a
state-of-the-art learning and leadership development facility.
The way individuals consume
information has also changed drastically over the past decade.
Firms and professional bodies are becoming more innovative in the
way they deliver training content to their staff and members to
ensure they keep up.
“Right now, it is a dynamic time
for the profession and continuing education. Like many other
businesses, technology is really changing. Now you can do a webcast
from your computer or office rather than from a TV studio – same
with e-learning. The barriers to entry for smaller organisations
are much lower and so we are finding that we have to compete in
different ways, based on quality and not cost, which is forcing us
to provide a more effective experience for our learners,” says
American Institute of Certified Public Accountants (AICPA) director
Apart from investment, what else makes the accounting
industry any better at training their staff then some other
professions? The standards and regulations to ensure the training
is carried out is another key driver.
In many countries, CPD is mandatory
because of global regulations set out by global oversight bodies,
like the International Federation of Accountants (IFAC). IFAC has
164 members and associates in 125 countries, and its members must
mandatorily comply with the International Accounting Education
Standards Board’s (IAESB) standard – IES 7 Continuing Professional
Development: A Program of Lifelong Learning and Continuing
Development of Professional Competence.
As a professional in the accounting
industry there are serious consequences for not keeping up your CPD
– also known as Continuing Professional Education (CPE) in the US.
Sanctions can include having your qualification revoked and losing
your licence to practise.
The Accountant’s research
found the majority (87%) of professional accounting bodies around
the world require their members to do CPD.
“For us, quality is non-negotiable
and I think for the type of environment we are in simply… you
cannot go to a client and give advice if you are not 100% sure it
is the latest and up-to-date information you are providing them
with,” KPMG’s Volschenk explains.
Do it, or else
The majority of Big Four and mid-tier accounting firms
worldwide set their own CPD policy requirements. These are based on
a global industry standard of 120 hours over a three-year rolling
period with a minimum of 20 hours per year. There must be a set
amount of verifiable CPD – these requirements are also set out in
IES 7 – where there is a record of attendance or assessment versus
non-verifiable CPD such as reading or research.
However, this can differ per
service line, professional body and country.
The alternative is for professional
accounting bodies’ CPD policy to set no minimum hours or unit
requirements, but to allow members to make their own decisions as
professionals. This is often referred to as ‘learner-led CPD’.
The type of CPD training is also
consistent across the profession globally and includes professional
knowledge, professional skills, technical training, professional
values, and ethics and attitudes. This can be attained through a
number of learner activities including e-learning, face-to-face,
reading, attending seminars/conferences and formal study.
The average amount of time spent on
CPD does not vary by staff level. Survey respondents say the
majority of staff undertake 20 hours or more of CPD per year. For
example, an assurance or tax professional is likely to have a set
requirement for how much technical training they do as a percentage
of professional development training.
Training is not only crucial to the
quality of the accounting industry, it is also an important factor
in staff retention. Almost half of accounting firms who responded
to The Accountant survey said the average length of staff
service at their firm is 5-10 years with two-thirds (67%) agreeing
that learning and development does have an impact on retention.
“Our professionals are highly
motivated to learn and are high achievers. We know they expect to
learn everyday at work and we ensure they can. We know our success
in providing this learning environment directly affects retention
and attracts potential hires to us,” adds Wolfe.
It is clear that the accounting
profession is, in most cases, leading the way in providing training
in comparison with other industries.
“I just recently had someone come
join my department in learning and development and she is also a
chartered accountant, she did her training at one of the other Big
Four firms,” says Volschenk. “She went out into the market for
about eight years but decided to come back [to a Big Four firm] and
a huge driver for her was the lack of development out there,”
It is clear that private banks must invest more of their revenue
into training. Could it also be time for the emergence of a Global
Wealth Management Standards Board to drive the professionalisation
of the industry? It would also provide private banks with a much
stronger voice to lobby national governments on key issues. If
this, what else can private bankers learn from accountants?