What a Fractional Compliance Officer Is

A fractional compliance officer is an experienced compliance professional who works for your firm for part of the week, usually on a fixed number of days, and is approved by the FCA to hold the SMF16 Compliance Oversight function in your name. They are your Senior Manager, not a supplier’s. They carry the personal accountability that comes with the role under the Senior Managers and Certification Regime, sign the board reports, own the compliance monitoring plan and answer to the regulator for the compliance function.

Most fractional compliance officers hold two to four appointments at once, across firms that are not in competition with each other. That spread is what makes the model work. Each firm buys the days it needs and gets a senior person who has seen how comparable firms solve the same problems.

The model suits firms that need a genuine Senior Manager but not forty hours a week of compliance oversight. Typical clients include:

• small and mid-sized directly authorised brokers, IFAs and wealth managers;
• investment managers, corporate finance boutiques and other wholesale firms;
• consumer credit firms, lenders and credit brokers with full permissions;
• payments and e-money firms in their first years after authorisation;
• firms applying for authorisation that need an SMF16 named in the application; and
• appointed representatives leaving a principal to become directly authorised.

This page is about the compliance officer role. If you need an MLRO, see our fractional MLRO (SMF17) page, and for other Senior Manager Functions see fractional and interim SMF cover.

Fractional, Part-Time, Outsourced or Interim?

These terms are often used interchangeably, but they describe different arrangements, and the difference matters for accountability.

Whichever route you choose, the responsibility for compliance stays with the firm and with the approved individual. A consultancy’s contract does not move that accountability. Our guide to what you can and can’t outsource sets out where the line sits, and our article on fractional or full-time compliance officer walks through the choice in more detail.

What the SMF16 Role Requires

The SMF16 Compliance Oversight function applies to Core and Enhanced firms under the SMCR. Limited Scope firms work differently, and our guide to which SMFs apply at which firm tier explains the difference. The holder is responsible for the compliance function the firm must maintain under SYSC 6.1: a function that operates independently, has the authority, resources, expertise and access to information it needs, and reports to senior management on the firm’s compliance risks. Our guide what is SMF16? covers the function in full.

In practice, a fractional SMF16 will normally:

• design and run a risk-based compliance monitoring programme, using a monitoring plan the board has approved;
• report to the board or governing body on compliance risk, breaches, complaints and monitoring results;
• advise the business on new products, client communications and financial promotions;
• support the board on its Consumer Duty obligations, including the annual board report, where the firm is within scope;
• track regulatory change and translate it into actions for the firm;
• manage breach recording and notifications to the FCA under SUP 15; and
• oversee complaints handling against DISP and deliver conduct rules and compliance training.

The role also carries personal exposure. SMF16 holders are subject to the Senior Manager Conduct Rules and the duty of responsibility, so a fractional compliance officer has to be able to show they took reasonable steps across all of their appointments, not just the busiest one.

How Many Days Does a Firm Need?

There is no rule that sets a minimum time commitment for an SMF16. The FCA’s test is whether the person has enough time and resources to discharge the role properly, and it looks at time commitment, other appointments and the firm’s risk profile when it reviews the Form A. As a broad guide:

• Two to four days a month: a small, low-complexity firm with stable products, few complaints and a well-run monitoring plan.
• One day a week: the most common starting point for small brokers, advisers and wholesale firms.
• Two to three days a week: firms with retail customers at scale, client money, appointed representatives, rapid growth or active regulatory change.

Days usually spike in the first three months, while the new SMF16 reviews the framework and resets the monitoring plan, and around board meetings, the Consumer Duty report and year-end. Our article on how many days a week a fractional compliance officer needs covers the factors in detail.

Combining SMF16 and SMF17 on a Fractional Basis

Many smaller firms appoint one person as both compliance officer (SMF16) and MLRO (SMF17). This is permitted, and it is common where the firm’s financial crime risk is modest. One fractional appointment then covers both functions, and the firm gets a single point of accountability for compliance and money laundering reporting.

The combined model needs care. The person must have genuine financial crime experience as well as conduct compliance, enough time for both, and a deputy or cover arrangement for the MLRO’s suspicious activity reporting when they are not working. As a firm grows, or its financial crime risk rises, splitting the roles usually becomes the better answer. See:

• Part-time and fractional compliance officer and MLRO for small firms
• Combined compliance officer and MLRO recruitment (SMF16/SMF17)
• When to split a combined SMF16/SMF17 role
• Fractional MLRO recruitment, if you need the MLRO on its own

Bridging a Gap: Interim Cover and the 12-Week Rule

When a compliance officer leaves suddenly, a firm does not have to leave the function empty while a new appointment is approved. The FCA’s rules in SUP 10C allow a person to cover a Senior Manager function without approval where the absence is temporary or reasonably unforeseen. Since the SMCR changes that took effect on 24 April 2026, the firm has 12 weeks to submit an application for the person covering, rather than to obtain approval, and that person can stay in post until the FCA decides. The cover can come from inside the firm or from an interim, and the Senior Manager Conduct Rules apply to them while they act.

That makes a properly planned interim appointment far more achievable than it used to be, but the clock still matters: the application has to be in within 12 weeks, so the search and the Form A need to start straight away. We often run both together: an interim covers under the 12-week rule while we shortlist fractional or permanent candidates, so the firm is never uncovered. Our guide to the 12-week rule explains how the cover works, and can we appoint them yet? covers the timing questions firms ask most.

What to Look For in a Fractional SMF16

A fractional compliance officer needs everything a full-time one does, plus the ability to work efficiently across several firms. The strongest candidates have:

• Sector-specific experience. A compliance officer from a discretionary wealth manager will not automatically understand a consumer credit broker or an e-money institution. Our guide to the experience that matters for your type of firm covers the differences.
• A record as an approved SMF16, ideally more than once, so they know the Form A process and the FCA’s questions.
• A manageable portfolio. Ask how many appointments they hold, how many days each takes and how they handle clashes, such as two board meetings in the same week or two incidents at once.
• Independence. They must be able to challenge the founders and the commercial team. A fractional SMF16 who depends on one client for most of their income may find that harder.
• Practical systems. Good fractional compliance officers bring tested templates for monitoring plans, breach logs, board reports and training, which saves time and fees.
• Clear availability. Agreed response times for urgent issues on non-working days, and a named arrangement for holidays.

Our article who checks the checker? looks at independence in more depth, and our fit and proper assessment template helps you record your own assessment before the Form A goes in.

Questions to Ask a Fractional Compliance Officer

• Which other firms do you work for, how many days does each take, and are any of them competitors of ours?
• What would you do in your first 90 days here, and how many days would that take?
• Tell me about a time you had to challenge a founder or chief executive. What happened?
• How would you handle a serious breach on a day you are working for another client?
• What will your board report contain, and how often will we receive it?
• How do you evidence reasonable steps across all of your appointments?

Contract Terms and Costs

Fractional compliance officers are usually engaged on a day-rate or monthly retainer, through their own limited company or as a direct contractor. Retainers suit firms that want predictable cost and a guaranteed slot in the diary. Day rates suit firms with uneven demand. Either way, the agreement should cover:

• the agreed days and how extra days are approved and charged;
• the responsibilities allocated to the individual in the statement of responsibilities;
• availability and response times outside working days;
• notice periods long enough to recruit and approve a successor;
• confidentiality and conflicts with other appointments; and
• access to the firm’s systems, records and board.

Our guide to fractional SMF agreements covers each clause, and what SMF roles actually pay sets out current rates. We will give you a realistic rate for your sector and days when we take the brief.

How We Run a Fractional Compliance Officer Search

1. Brief. We map your permissions, products, customers, SMCR tier and current compliance arrangements, and agree how many days the role really needs.
2. Search. We approach fractional and portfolio compliance officers with experience in your sector, and check their current appointments, capacity and conflicts before they reach you.
3. Shortlist. You receive a short, assessed shortlist with our view of each candidate’s fit, their portfolio and the days they can commit.
4. Approval. We help you and the chosen candidate prepare the Form A, the statement of responsibilities and the fit and proper evidence, drawing on our guide to what goes wrong in Form A submissions.
5. Bridging. If you have a gap now, we arrange interim cover under the 12-week rule while the search runs.

Our specialist team runs each search, and Adrian Lawrence FCA oversees every SMF Capital mandate. Once the appointment is made, our article on the first 90 days for a new MLRO or compliance officer sets out what a good start looks like.

When a Firm Outgrows a Fractional SMF16

A fractional arrangement is often the right answer for several years, but the signs that a firm needs more are usually clear: the days creep up month after month, the monitoring plan slips, the board wants more frequent reporting, the firm moves to Enhanced status, takes on appointed representatives or client money, or enters a new market. At that point, a permanent compliance officer, or a head of compliance with a team, becomes better value. We recruit those roles too, through our compliance officer (SMF16) recruitment and chief compliance officer and head of compliance recruitment services, and a good fractional SMF16 will help you plan the handover.

Frequently Asked Questions

Can a fractional compliance officer hold the SMF16 function?

Yes. There is no requirement for the SMF16 to be full-time. The FCA needs to be satisfied that the person is fit and proper and has enough time to do the job, taking account of their other appointments and your firm’s risk profile.

How many firms can a fractional compliance officer work for?

There is no fixed limit, but they need FCA approval at each one. Most experienced fractional compliance officers hold two to four appointments. The question is whether they can give each firm the time it needs, including at peak periods, and still evidence reasonable steps across all of them.

Is a fractional compliance officer the same as an outsourced one?

Not quite. A fractional compliance officer is an individual you engage directly. An outsourced compliance officer is usually supplied by a consultancy with its own team behind them. In both cases, the approved individual and your firm keep the regulatory responsibility.

Can the same person be our MLRO?

Often, yes. Many smaller firms appoint one fractional person as SMF16 and SMF17. They need real financial crime experience and a cover arrangement for suspicious activity reporting when they are not working for you.

How quickly can you find a fractional compliance officer?

We aim to present a shortlist within days of taking the brief. FCA approval then depends on the Form A, and the regulator has up to three months to decide on a complete application, so it pays to start early. Where there is an immediate gap, we arrange interim cover under the 12-week rule.

Do you only recruit, or do you provide compliance services too?

We are a specialist recruiter. We find and assess the person who will hold the role, and they become your Senior Manager. We do not provide compliance consultancy ourselves.