Neil Schofield – Financial Markets Training

I always think that Gordon Ramsay’s ‘Kitchen Nightmares’ revolves around two principal themes: owners that don’t seem to know anything about the restaurant business and chefs that don’t know how to cook. I can’t seem to be able to enjoy a meal out these days without those two ideas running through my head. If nothing else it has made me a more discerning diner, frequenting those places where you know that the whole experience will be pleasurable and avoiding those that you suspect will be featured in the next series.

A key theme of the programmes is how he distinguishes between value rather than price. Frequently, Ramsay will query how restaurants can justify charging high prices while often using poor quality food that is sometimes days old. He encourages the use of fresh local produce and emphasises a small menu. This ensures that all the food is cooked from fresh and that the restaurant uses some strategic advantage offered by its particular location. It is also noticeable that the programme champions the small independent restaurant over the high street chains.

So what has this got to do with financial training? I write as a financial markets trainer of some 17 years experience having worked for two ‘premier league’ investment banks, a small and large training company and now finally working for myself. A lot of the problems alluded to in ‘Kitchen Nightmares’ recur all too frequently in the financial training industry. While working on the ‘buy side’ of the industry I was always being approached by a number of different types of training company from the largest in the industry to the proverbial one man band. There was an overriding perception that the financial training industry suffered from a lack of quality. However, I think that the issue was one of value: the fees for financial markets training are not cheap and can range from £2,000 to nearly £4,000 and to quote Forest Gump’s Mum ‘you never know what ya gonna git’.

There were two aspects to this issue of value: trainers who didn’t know their subject and trainers whose grasp of educational principles was non-existent. A former colleague who was interviewed for a financial newspaper nearly 10 years ago argued that if you were to say that there were a dozen good financial trainers in the industry that was probably six too many. Finding good trainers is often a matter of good luck but we will argue later that there are some simple principles that can help buyers make the right choice.

Some providers will specialise in certain subject matter largely due to prior experience. If these trainers can transfer their knowledge into concepts and principles that can be clearly communicated this is an unbeatable formula. However, specialising in one subject area that suffers a downturn in business can clearly limit business opportunities for the selling company. One school of thought suggests that a trainer with a wide portfolio of teaching subjects could not possibly acquire all the relevant knowledge. I tend to disagree as there are a small number of trainers who can offer this and are generally of high quality. Some trainers specialise in delivering to particular audiences: perhaps training only front office dealers or graduates. My own personal suspicion is that this often masks some problem: usually a lack of product knowledge or the inability to communicate clearly.

The size of a training firm as an indication of quality is also a poor predictor as I have seen good and bad trainers at both large and small companies. Prior work experience is not always the best indicator. The ideal trainer is someone who has been in the business for many years and can clearly communicate. A cursory glance at trainers’ CVs often reveals impressive details of years of applied industry experience, innovation and management of hordes of individuals as well details of substantial budgets for which they were responsible. What is missing is their ability to communicate and educate.

Which brings me onto the second issue relating to value – a trainer’s ability to… well… train. The perceived wisdom relating to the financial training industry tends to be that the delivery approach has to be different from that of our ‘soft skill’ cousins due to the technical nature of the content. The argument goes that since the material is very technical, PowerPoint slide shows are a prerequisite. Being cognisant of this many training providers will market themselves as being ‘lively’, ‘engaging’ and overall that the sessions on offer are ‘participative’. When one reviews the materials on offer the reality does not always match the marketing hype. I reckon the phrase “Death by 1,000 PowerPoints” was coined by a participant on a financial markets training course. As a result of the over reliance on slides as a medium of delivery participants now have certain expectations when they come to a training session. They expect to sit passively and listen to some clever trainer who will in effect be saying ‘look how much I know and how little you do’. Everyone knows that sitting passively listening to slides will not help them understand or apply a concept. I recall one incident when trying to recruit a trainer for a former employer. The candidate stated that they were sure they could do the job as they had been giving client presentations for years.

However, very often (particularly with front office participants) there is a steadfast reluctance to embrace any notion of true teaching principles. Arguably this is because the participants perceive that anything that will show a lack of knowledge will result in some punitive action against them. It will need brave and far sighted senior managers to reverse this trend. One senior manager gave his staff a blunt ultimatum – do 40 hours of training or you don’t get a bonus. Believe you me that certainly focused their minds.

There are certain trends that concern me as a professional trainer. The first is the increased use of external 3rd parties to manage training vendor relationships. From those with whom I have experience, they seem to feel that ‘big is beautiful’. This is a flawed argument as value is not a function of company size. The other aspect of this is the ongoing pressure on trainer fees, which are often seen as exorbitant. However, this misses an important point. Every bank wants value but this is often incorrectly translated into ‘cheapest price’. If fees are forced lower it will discourage an influx of new talent and will only drive trainers into other careers they consider to be more lucrative. The final concern is growing demand to deliver more and more content in increasingly shorter time periods. As a plea to all training buyers, please be realistic about what can be achieved during a session. Although this has been one of the arguments put forward to support e-learning it is not a medium that has delivered according to the initial hype. But don’t start me on that!

So how do you identify value? There are some basic principles that can be applied:

• Make sure that the trainer for a specific assignment has been identified and that there is no scope for substitution without the buyer’s permission
• Make sure you meet the trainer. Could you spend a day in their company?
• Ask about the trainer’s training experience and don’t be fooled by irrelevant work experience. Don’t worry if they cannot be specific about training work performed at other institutions as very often training contracts will have privacy clauses.
• How good are they at analysing your training needs? A good trainer will grasp a meeting by the scruff of the neck and should ask a series of probing questions to identify the key training issues
• Ask them what they know about educational principles and how they apply them in class. Again don’t accept the answer ‘the session is fully interactive / participative’. Ask for specific examples.
• Avoid programmes that promise to deliver the earth in half a day. Sessions should be content light. Training is not cheap and so don’t think that people can attend short sessions and walk away as experts.
• Its stating the obvious, but don’t confuse price and value.
• Make sure that the outlines contain more than a simple listing of topics. This is poor practice and you should demand clear aims, objectives and outcomes (they are not the same thing).

Financial Markets Training offers training courses in a wide variety of different asset classes to clients on a global basis. For more detailed information please see www.fmarketstraining.com