Non-Financial Misconduct (NFM): Is your firm ready? - Webinar Summary | Non-Financial Misconduct (NFM): Is your firm ready?

Non-Financial Misconduct (NFM): Is your firm ready?

Webinar Summary: Key video highlights and takeaways from our webinar with PIMFA and Clyde & Co on Wednesday 5 August 2026.

Webinar Summary: Key video highlights and takeaways from our webinar with PIMFA and Clyde & Co on Wednesday 5 August 2026.Contents

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Session Summary

On Wednesday 5 August 2026, Elephants Don’t Forget hosted a webinar examining the legal, regulatory, and operational challenges surrounding the FCA’s new Non-Financial Misconduct (NFM) rules and guidance.

Moderated alongside legal and policy experts – including Debbie Ives (Compliance Director at Elephants Don’t Forget), Shadia El Dardiry (Legal Director at Clyde & Co), and Maja Erceg (Senior Policy Advisor at PIMFA) – the discussion focused on how firms can move beyond policy updates to build robust, evidence-led compliance frameworks.

With 678 senior financial services professionals in attendance, polls conducted during the session highlighted variations in readiness. When asked, ‘How ready is your firm for 1 September 2026?’, just 13% of respondents described their firms as ‘very ready – policies, training, escalation and senior ownership are joined up’. A further 29% reported being ‘fairly ready’, though acknowledged that their evidence remains patchy.

The largest proportion (38%) indicated that implementation work was still in progress, while 21% were either not ready or unclear on where their organisation stood.

A secondary poll (multiple choice) exposed a particularly important evidence gap in how firms report readiness to their Boards. While 66% rely on training-completion data, 51% track culture indicators, and 38% report investigation outcomes, only 5% systematically test role-based understanding beyond mandatory training completion.

This brings into question whether demonstrating that an employee has completed an annual e-learning module proves they understand their specific obligations or possess the capability to apply that knowledge when complex, ambiguous scenarios arise in practice.

Key highlights in this video workbook include:

Why the FCA is interested in ‘grey areas’.
Why training attendance doesn’t mean people understand.
Why recording decisions are critical.
Seven priority action points for firms.

1.

NFM: The FCA will be interested in ‘grey areas’

"Firms are most likely to believe that completing the work simply means refreshing policies, along with establishing senior oversight and training. However, the areas regulators will actually be interested in are: Have you mapped grey areas?

Have you prepared managers to act? Are you connecting HR with compliance? These require proving that culture and conduct expectations are embedded in day-to-day decisions, supported by evidence of judgment, challenge, intervention, and escalation."

2.

NFM: Evidence, not a checklist

"The requirement that often looks straightforward in a policy document becomes really tricky in a live case. And it's not the date, it's not the reporting deadline, it's not even the six-year reference period. It's the expectation that firms can demonstrate and justify their judgment through an evidential record.

The greatest vulnerability is rarely the decision itself – it is being unable to prove, perhaps months or years later, that the decision was reasonable when it was made."

3.

NFM: Training attendance & completion doesn’t prove people know what to do

"It's about how firms prove that training has actually been understood. As we know, attendance at training does not mean that people have understood what they need to do, how to apply it in their own situations, or what the escalations are. I think that is a big gap that some firms have.

Relying on numbers like the annual completion of e-learning doesn't necessarily illustrate readiness."

4.

NFM: The firms that navigate it well won’t necessarily be the ones who have the longest policies

"Policies, training, and governance frameworks work well when the facts are clear. The real test comes when conduct sits in the space between personal and professional, between intentional and careless, or between serious and merely inappropriate.

That is where firms often discover that their policy stops exactly where the real risk begins."

5.

NFM: Building evidence & recording decisions

"Beyond documenting investigation and disciplinary outcomes – including clear details of any sanctions – you must record the underlying decision-making rationale. You never know when a regulator might inquire about a decision.

Even if you don't immediately need to issue a regulatory reference, you should record whether the conduct was relevant to fitness and propriety or constituted a Conduct Rule breach."

6.

NFM: It’s a judgement exercise

"The line is not drawn by where conduct occurs; it is drawn by whether the conduct could reasonably affect fitness and propriety, workplace safety, or firm culture, or create a regulatory risk.

A common misconception is that increasing scrutiny of non-financial misconduct requires firms to monitor employees' personal lives, social media activity, or private relationships. That is not the expectation."

7.

NFM: Who owns it?

"When a difficult case arrives, who actually owns the decision? The problem here is that non-financial misconduct sits at the intersection of multiple functions: HR, Compliance, Legal, and the Business.

The danger is that each function assumes another is ultimately accountable. As a result, important decisions will be delayed, inconsistently applied, and insufficiently escalated because responsibility is dispersed rather than owned."

8.

NFM: Boards should want to know where employee understanding gaps are

"The training has been completed, but has it been tested? Has understanding been tested? If I were on the Board, I’d want to know that people understood what they were doing and understood how to escalate issues.

I’d want to know what gaps we have and what we’re doing to address them and improve our processes."

8.

NFM: Seven priority action points for firms

"Clever Nelly is specifically designed to assess continuous understanding. It ensures that once training is completed, that knowledge remains embedded rather than forgotten. Scenario testing and updating scenario-based questions are central to this.

Additionally, assessing culture through targeted questions can highlight internal perception gaps and areas needing improvement, providing Boards with a clear cultural barometer."

NFM: How we help

Clever Nelly is a multi-award-winning, AI-powered continual assessment solution that financially guarantees employees learn, retain, and transition their workplace training into evidenced in-role competence.

Deployed by leading brands across the sector, our technology treats every employee as an individual. Operating within the flow of work, it takes, on average, less than one minute per day to support employees to learn and retain what you need them to know.

We can work with your firm to implement your existing NFM training materials and support you to develop custom NFM question sets unique to your firm and context, creating consistency around definitions, reducing compliance risk, and providing you with a new stream of objective data to improve internal governance and reporting.

Key benefits:

Our technology perfectly aligns with all the positive indicators of how Conduct Rule training should be delivered, as defined by the FCA, providing firms with a best-in-class assessment solution.
It quickly scales understanding of NFM across the firm, personalising the learning journey for each employee.
It embeds new policy and process changes, supporting firms to assess what has been understood and where individual gaps in knowledge exist.
It provides an interactive way to create firm-specific scenario questions, helping employees retain what they need to know while assessing both their knowledge and judgement.
It provides a continual stream of risk data to locate where NFM risk could manifest due to a lack of employee understanding.
It provides a unique and new source of ‘people data’ to improve internal challenge, governance, and senior management oversight.

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“Clever Nelly guarantees that all our people have learned what they’ve been trained. From a compliance perspective, I would find it very difficult to evidence where our knowledge and competency was without it.”

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