Staffing a Section 166 Remediation: Who You Need and When
When the FCA requires a skilled person review under section 166, the firm’s first concern is usually the review itself. The second, which often arrives within weeks, is people. Reviews generate remediation: backlogs to clear, controls to rebuild, customers to contact, and a regulator expecting visible progress. Most firms don’t have the spare capacity to do that alongside running the business.
This post sets out who a typical remediation needs, in what order, and what interim support costs, based on how we staff these programmes.
What a Skilled Person Review Triggers
Under section 166 of the Financial Services and Markets Act 2000, the regulator can require a report from an independent skilled person on matters of concern. The FCA’s approach is set out in SUP 5 of its Handbook. The firm pays, and the regulator sets the scope. The findings usually lead to a remediation plan the firm must deliver and evidence, often over many months.
The areas most commonly involved are financial crime controls, customer outcomes, client assets and governance. Each has different staffing needs.
The Four Phases and Who You Need in Each
| Phase | What happens | Who you typically need |
|---|---|---|
| 1. Diagnosis | Skilled person reviews; firm responds to requests and interviews | Senior Manager owning the response; programme coordinator; subject-matter support for data requests |
| 2. Planning | Remediation plan agreed with the regulator; resources and timetable set | Programme manager; interim SMF-level lead for the affected area; finance input on cost |
| 3. Execution | Backlogs cleared, controls rebuilt, customers contacted, redress paid | Analysts and case handlers at volume; quality assurance; team leads; data and reporting |
| 4. Validation | Skilled person or internal audit tests that remediation has worked | Quality assurance lead; internal audit; the permanent Senior Manager taking ownership |
The biggest mistake is recruiting the execution team before the plan and leadership are in place. Volume analysts without clear procedures and quality assurance produce work that fails validation and has to be redone.
The Key Roles
An Interim Senior Manager for the Affected Area
If the review concerns financial crime, the firm often needs an experienced interim MLRO or head of financial crime. If it concerns conduct, an interim compliance officer. Sometimes the existing Senior Manager stays in role and the interim leads the remediation alongside them. Sometimes the regulator’s findings make a change necessary. Either way, the regulator wants to see someone credible and accountable leading the work.
A Programme Manager
Remediation is a programme with a regulatory deadline. A programme manager with regulatory remediation experience keeps the plan, dependencies, reporting and regulator updates on track, freeing the Senior Managers to make decisions.
Analysts and Case Handlers
Customer due diligence refreshes, alert reviews, file reviews and redress calculations are volume work. Numbers depend on the size of the backlog. Contract analysts are usually engaged in teams with a team lead.
Quality Assurance
Independent quality assurance of the remediation work is essential. It catches errors before the validation phase and gives the Senior Manager and the regulator confidence in the results.
Finance and Data
Redress programmes need finance professionals to calculate and track payments and provisions. Most remediation needs data analysts to identify affected customers and produce management information for the board and regulator.
Indicative Interim Rates
| Role | Typical day rate (outside IR35) |
|---|---|
| Interim MLRO / SMF17 | £700–£1,100 |
| Interim SMF16 compliance oversight holder | £700–£1,100 |
| Interim head of financial crime | £600–£900 |
| Remediation programme manager | £600–£900 |
| Interim financial crime manager | £450–£700 |
| Quality assurance lead | £400–£600 |
| KYC / CDD and file review analysts | £200–£350 |
These are indicative ranges. Rates vary with firm size, sector, urgency and how long the engagement will run. Our SMF and compliance salary guide has the full set of salaries and day rates.
A skilled person review at a payments firm finds a large backlog of customer due diligence refreshes and weaknesses in transaction monitoring. The firm appoints an interim head of financial crime within a fortnight to lead the response, then a programme manager. Only once procedures and quality assurance are agreed does it bring in a contract team of analysts to clear the backlog. The permanent MLRO is recruited in parallel and joins before the validation phase, so there’s a clear owner when the skilled person returns.
Sequencing the Hires
Remediation staffing sequence
- Week 1–2: Confirm the accountable Senior Manager; appoint an interim lead if needed
- Week 2–4: Appoint the programme manager; agree governance and reporting
- Week 3–6: Agree procedures, quality standards and the plan with the regulator
- Week 4–8: Appoint quality assurance and team leads
- Week 6 onwards: Bring in analysts at volume
- Throughout: Recruit the permanent Senior Manager so they own the outcome at validation
The Permanent Hire Matters Most
Interims can stabilise a firm and clear backlogs, but the regulator will want to see lasting change, owned by permanent Senior Managers. Recruiting the permanent compliance officer, MLRO or chief risk officer early, rather than once the remediation is finished, means the person who will own the controls long term helps shape them. Candidates for these roles will want to understand exactly what they’re inheriting, so be open about the review and the plan.
Staffing Different Types of Remediation
Financial Crime
The most common type. Expect large volumes of customer due diligence refreshes and alert reviews, requiring contract analysts at scale, led by an experienced interim head of financial crime or MLRO.
Customer Outcomes and Redress
Reviews of affordability, suitability, fair value or claims handling often lead to customer contact and redress. These need case handlers with relevant sector knowledge, finance support to calculate and track redress, and a compliance lead who understands the Consumer Duty.
Client Assets
CASS remediation needs specialists who understand reconciliations, records and the client assets rules. The pool is small, so start early.
Governance
Where a review finds weaknesses in governance itself, the answer is often board and Senior Manager changes: an independent chair or committee chair, a stronger risk function, or clearer allocation of responsibilities. These are longer-term appointments and should start as soon as the findings are clear.
Common Mistakes
- Hiring volume before leadership, so analysts work without clear procedures.
- No independent quality assurance, leading to failed validation.
- Stretching existing staff across remediation and business as usual until both suffer.
- Leaving the permanent hire until the end, so no one owns the new controls.
- Underestimating the duration. Most remediation programmes take longer than first planned.
Keeping the Board and Regulator Informed
Staffing decisions are part of the story the firm tells the regulator. Board papers and regulator updates should show who is leading each workstream, what resources have been added and how progress is measured. A clear, adequately resourced plan is one of the strongest signals that a firm is taking the findings seriously. Independent non-executives, particularly the risk and audit committee chairs, often play a key role in overseeing the response.
Remediation Staffing
Services and guides for firms responding to a skilled person review. Every SMF search is led personally by Adrian Lawrence FCA
Interim Leadership
Senior Managers who can start quickly.
→ Fractional and interim SMF cover
→ MLRO recruitment
Control Functions
Permanent owners for the new controls.
→ Compliance officer (SMF16)
→ Chief Risk Officer (SMF4)
Accountability
What the regulator will assess.
→ The Conduct Rules
→ FCA enforcement trends
Governance
Board oversight of remediation.
→ Chair and committee chairs
→ Governance structure review
Every SMF search is led personally by Adrian Lawrence FCA
Frequently Asked Questions
How quickly can you provide an interim MLRO or compliance lead?
Usually within days to two weeks, depending on sector and seniority.
Do you provide analyst teams as well as Senior Managers?
Our focus is Senior Manager and leadership roles. We can advise on structuring the wider team and introduce specialists where needed.
Should we replace the existing Senior Manager?
Not necessarily. It depends on the findings and the individual. Often an interim leads the remediation alongside the existing holder.
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 interim and permanent appointments for firms responding to skilled person reviews. View Adrian’s ICAEW profile.
Facing a Skilled Person Review?
Talk to us early. We can put interim leadership in place quickly and start the permanent search alongside it.
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.
