Hiring Your First Senior Manager: How to Make the Case to the FCA
Some of the best Senior Manager appointments go to people who have never held a Senior Manager Function: the deputy MLRO who has run financial crime for years, the head of risk ready to step up, the senior adviser who now needs to run the business. They’re often more available, closer to the detail and more motivated than experienced holders being courted by several firms.
But the regulator will want to see why they’re ready. This post is for firms: how to build that case, what to commit to, and the mistakes that cause first-time applications to stall.
What the Regulator Is Looking For
Every application is assessed against the fit and proper test: honesty, integrity and reputation; competence and capability; and financial soundness. For a first-time Senior Manager, the first and third parts are usually straightforward. Competence is where the case has to be made. The regulator wants evidence that the individual has the knowledge, experience and judgement to perform this function, at this firm, now, and it may interview them to test it.
That doesn’t mean they must have held the function before. It means the firm must show what they’ve already done that proves they’re ready, and how any gaps will be closed.
Build an Evidence Map
The most effective tool we use is a simple evidence map. Take the draft Statement of Responsibilities and, for each responsibility, record the candidate’s direct experience and any gap.
| Responsibility | Evidence of experience | Gap | How the gap is covered |
|---|---|---|---|
| Oversight of the compliance monitoring programme | Designed and ran the monitoring plan for 3 years as deputy | None | – |
| Reporting to the board on compliance | Presented quarterly reports to the risk committee | Hasn’t presented to the full board | Board presentations from month one; chair mentoring |
| Regulatory engagement | Attended supervisory meetings; drafted notifications | Hasn’t led FCA relationship | Joint meetings with CEO for first six months |
| Consumer Duty oversight | Led outcome monitoring workstream | None | – |
| Financial promotions | Signed off promotions under delegated authority | None | – |
The completed map does three things: it shows the firm exactly where the risk sits, it gives the regulator a clear and honest picture, and it gives the candidate a structured first year. Candidates who have been honest about gaps are, in our experience, more likely to be approved than those who claim to have covered everything.
What the Firm Can Commit To
Where there are gaps, the application can explain how the firm will support the new Senior Manager. Typical commitments include:
- Mentoring from an experienced Senior Manager, non-executive or external adviser.
- Structured training on specific areas, such as prudential rules or board reporting.
- Additional oversight for a period, such as a non-executive with relevant expertise attending key meetings.
- A phased handover of responsibilities where the outgoing holder is still available.
- External assurance, such as an independent review of the function after the first year.
Only commit to what the firm will actually deliver. The regulator may ask later, and a firm that didn’t follow through on what it told the regulator is in a weak position.
A mid-size wealth manager’s compliance officer is retiring. The deputy has run the monitoring programme and Consumer Duty work for four years but has never held SMF16 or led the FCA relationship. The firm builds an evidence map, commits to six months of joint supervisory meetings with the chief executive and quarterly mentoring from an independent non-executive, and books the retiring compliance officer for a one-month overlap. The application is approved without further questions.
Preparing for a Regulator Interview
First-time candidates are more likely to be interviewed, particularly for significant roles. Preparation should cover:
Interview preparation checklist
- The firm’s business model, customers and main risks
- The candidate’s own Statement of Responsibilities, line by line
- Recent board papers, risk reports and monitoring findings in their area
- Any correspondence with the regulator relevant to the role
- The Senior Manager Conduct Rules and the Duty of Responsibility
- What ‘reasonable steps’ would look like in their first six months
- How they’d escalate a serious concern, and to whom
- Where their experience is thinner, and how that’s being addressed
Mock interviews with the chair or an experienced Senior Manager help. So does reading the firm’s own documents as a regulator would.
Common Reasons First-Time Applications Stall
- Overstated experience. A CV or application that claims more than references or the interview support.
- No plan for the gaps. Gaps are acknowledged but nothing explains how they’ll be covered.
- A vague Statement of Responsibilities. The regulator can’t assess readiness for responsibilities that aren’t clearly described.
- A poorly prepared interview. The candidate can’t talk about the firm’s specific risks.
- Late disclosure of something in the candidate’s history.
Our guide to what goes wrong in Form A submissions covers the application itself in more detail.
What the Candidate Should Bring to the Process
First-time candidates can make the firm’s job much easier. The most effective ones arrive with a clear account of what they’ve done: specific decisions they’ve taken, frameworks they’ve built, board papers they’ve written and occasions when they’ve challenged senior colleagues. They’re candid about where their experience is thinner and have thought about how they’d close the gap. They’ve also checked their own record on the FCA Register and thought about what their references will say.
A candidate who does this work before the interview gives the firm most of the evidence map ready-made, and usually performs far better in a regulator interview too.
The First Year After Approval
Approval isn’t the end of the process. The firm’s annual fitness and propriety assessment should confirm that the support committed in the application was delivered and that the new Senior Manager is growing into the role. Reviewing the evidence map at the end of the first year is a simple way to do this, and it gives the individual a clear picture of their own development.
Internal Candidate or External?
An internal first-time candidate brings knowledge of the firm, its systems and its people, and continuity the regulator values. An external first-time candidate may bring broader experience but needs time to learn the firm. Either can work. The decision often comes down to how quickly the firm needs the new Senior Manager to operate independently, and how much support it can realistically provide.
Where a firm isn’t sure its internal candidate is ready, it can benchmark them against the external market. That’s part of what we do in SMF recruitment services: presenting external candidates alongside an internal one so the board can compare.
The Roles Where First-Time Appointments Work Best
- SMF16 Compliance Oversight at Core firms, where deputies often have strong, directly relevant experience.
- SMF17 MLRO, where deputy MLROs have run the reporting process for years.
- SMF3 at advice and wealth firms, where senior advisers step into management. See our page on RDR-qualified Senior Managers.
They’re harder for SMF1 at larger firms and for board roles at dual-regulated firms, where the regulators usually expect prior experience at a comparable level.
Timing
Allow for the possibility of an interview and follow-up questions when planning. First-time applications can take longer to decide than those for experienced holders, particularly for significant roles. Our SMF appointment timeline sets out the stages.
First-Time Senior Managers
Guides and services for firms backing a first-time appointment. Every SMF search is led personally by Adrian Lawrence FCA
Getting Approved
The standard and the application.
→ The fit and proper test
→ Form A mistakes to avoid
Assessment
Testing readiness.
→ Interviewing an SMF candidate
→ Statements of Responsibilities
Candidates
For first-time Senior Managers.
→ Current SMF jobs
→ Register confidentially
Every SMF search is led personally by Adrian Lawrence FCA
Frequently Asked Questions
Does the FCA approve first-time Senior Managers?
Yes, regularly. The application must show why the individual is ready and how any gaps are covered.
Will the FCA interview our candidate?
It may, particularly for significant roles and first-time applicants. Preparation makes a real difference.
Should we benchmark an internal candidate externally?
Often it helps, both for the board’s confidence and to confirm the internal candidate is the right choice.
About the Author
Adrian Lawrence FCA is the founder of SMF Capital. He is a Chartered Accountant and Fellow of the ICAEW, holds a practising certificate in his own name, and is a former listed-company Finance Director with a BSc from Queen Mary College, University of London. He founded FD Capital in 2018 and has since built a network of five specialist recruitment practices. He leads every SMF Capital search personally, including first-time appointments where the case to the regulator needs careful preparation. View Adrian’s ICAEW profile.
Backing a First-Time Senior Manager?
We can help you assess readiness, benchmark against the external market and prepare the case. Get in touch for a confidential conversation.
Adrian Lawrence FCA is the founder of SMF Capital and a Fellow of the Institute of Chartered Accountants in England and Wales and holds an ICAEW practising certificate in his own name. He holds a BSc from Queen Mary College, University of London, and has over 25 years of experience working with boards, investors and business owners across the UK. He founded SMF Capital to help FCA and PRA-regulated firms appoint the Senior Managers the regulators expect, with the fit and proper assessment built into every search, and personally leads every Senior Manager Function search.
