Hiring Senior Managers From the FCA, the Big Four or Industry: The Trade-offs
Candidates for Senior Manager roles in compliance, risk and financial crime tend to come from three places: the regulators, the Big Four and consultancies, and other regulated firms. Each background brings real strengths, and each tends to leave predictable gaps. Firms that understand the difference write better role profiles, ask better interview questions and make appointments the regulator is comfortable approving. This guide compares the three routes from the hiring side.
Why Background Matters More for Senior Managers
For most senior hires, background is one factor among many. For a Senior Manager, it goes to the heart of the approval. The regulator assesses whether the candidate has the competence and capability to perform the specific function, under the FIT sourcebook, and that assessment leans heavily on what the person has actually done. Someone who has advised on controls has a different track record from someone who has owned them. Someone who has supervised firms has a different track record again. None is automatically better; the question is fit with the role and the firm.
The Three Routes Compared
| Ex-regulator | Big Four or consultancy | Industry | |
|---|---|---|---|
| Typical strengths | Deep knowledge of supervisory expectations; credibility with the regulator; strong sense of what good looks like across many firms | Breadth across clients; structured project delivery; strong on remediation, testing and documentation | Experience of running a function day to day; commercial judgement; has personally held accountability |
| Typical gaps | May not have run a team or budget in a firm; less exposure to commercial trade-offs | Advisory rather than accountable; may not have lived with the consequences of recommendations | May only know one firm’s way of doing things; possible blind spots on wider market practice |
| Best suited to | Firms under close supervision; remediation; firms entering a more demanding regime | Building or rebuilding frameworks; s166 remediation; firms that need structure fast | Steady-state roles; growing firms needing an operator; smaller firms needing a hands-on Senior Manager |
| Approval consideration | Must show competence in running, not only assessing, a function | Must show personal accountability and decision-making, not only advice | Usually the most straightforward if the role matches past experience |
Hiring From the Regulator
People who have worked in supervision, enforcement or policy at the FCA or PRA bring a view few others have: they have seen how many firms handle the same issue and know what the regulator worries about. For a firm under close supervision, or one dealing with a regulatory issue, that perspective can be extremely valuable.
The questions to test at interview are about operating rather than assessing. Has the candidate ever owned a budget, managed a team through a difficult period, or made a judgement call that had commercial consequences? How would they handle a business head who disagrees with them? An ex-regulator who has also spent time in industry is often the strongest combination.
There are two practical points. First, check whether the candidate is subject to any post-employment restrictions or conflicts arrangements from their previous employer, and how the firm will manage any perceived conflict if they previously supervised it or its competitors. Second, don’t hire an ex-regulator mainly for their relationships. The regulator will expect them to be held to the same standard as anyone else, and firms that present a former supervisor as a way of smoothing things over tend to have the opposite effect.
Hiring From the Big Four or a Consultancy
Advisory candidates are often excellent at building frameworks quickly: policies, risk assessments, monitoring plans, management information and remediation programmes. Many have worked on skilled person reviews, which gives them a clear view of where firms fall short. For a firm that needs to rebuild a function, that experience is hard to beat.
The gap is accountability. Advising a client on what to do is different from being the person who must decide, live with the decision and answer for it under the Senior Manager Conduct Rules. Interview questions should draw out situations where the candidate made a decision with incomplete information, managed pushback from senior people, or handled the consequences of a mistake. Secondments into client firms, or a previous in-house role, can provide that evidence.
For a first Senior Manager role, the regulator will look closely at whether an advisory background has prepared the candidate for personal accountability. Our guide to hiring your first Senior Manager covers how to make that case.
Hiring From Industry
An industry candidate who has already run the function in a similar firm is usually the lowest-risk hire, both for performance and for approval. They know how the role works in practice, what a realistic budget looks like and how to build working relationships with the business.
The risks are different. A candidate who has spent many years at one firm may know only one way of doing things, and may not have seen how standards have moved elsewhere. A candidate from a much larger firm may struggle without the specialist teams they are used to. One from a much smaller firm may find the governance of a larger firm slow. Questions about scale, resources and how they have adapted to change will reveal most of this.
Sector experience also matters more than many firms expect. An MLRO from retail banking may not be the right fit for a crypto-asset firm, and a compliance officer from wealth management may not know consumer credit. Our sector pages, such as payments and fintech and insurance, cover what specific experience each sector tends to need.
Scenario: A payments firm under a skilled person review needs a new MLRO. The shortlist includes a former FCA supervisor with no in-house experience, a Big Four director who led several financial crime remediations, and an industry MLRO from a smaller e-money firm. The firm chooses the Big Four candidate to lead the remediation and hires the industry MLRO as deputy, with a plan for the deputy to take over once the review has closed. The ex-regulator is retained as an adviser to the board risk committee.
What to Test at Interview, by Background
| Background | Questions that reveal the most |
|---|---|
| Ex-regulator | Tell us about a time you had to balance a regulatory expectation against a commercial objective. How have you built and led a team? What would you do differently from the firms you supervised? |
| Big Four or consultancy | Describe a decision you owned, not one you recommended. When did a client reject your advice, and what happened? How would you handle being overruled by the CEO? |
| Industry | How does your current firm’s approach compare with market practice? What have you changed in the last two years? How would you work with fewer resources, or with more governance? |
| All candidates | Walk us through how you would take reasonable steps over each responsibility in this Statement of Responsibilities. What would you want to see in your first 90 days? |
Our full guide to interviewing an SMF candidate covers the wider questions, and our fit and proper assessment template helps document the decision.
Pay Expectations Differ by Background
Pay expectations vary between the three groups. Big Four directors and partners moving in-house often expect packages close to their current earnings, even where the in-house role is smaller. Ex-regulator candidates may be coming from lower base salaries and can be more flexible, but often value role scope and stability. Industry candidates usually benchmark against peers in similar firms. Our salary guide and analysis of what SMF roles actually pay give current ranges.
Getting the Mix Right Across the Board
The most effective senior teams rarely come from one background. A firm with an industry CFO and CEO may benefit from a compliance officer with regulator or advisory experience, and the reverse is also true. The board should consider the senior team as a whole, as it would when using a board skills matrix, and recruit to fill the gaps rather than repeat the strengths it already has.
Senior Manager Recruitment
Candidates from regulators, advisory firms and industry. Every SMF search is led personally by Adrian Lawrence FCA
Control Functions
Compliance, risk and financial crime.
→ Compliance officer (SMF16)
→ MLRO (SMF17)
Remediation
Leaders for firms under review.
→ Staffing a s166 remediation
→ Interim cover
Board and Executive
Building a balanced senior team.
→ Multi-SMF team builds
→ Chair and committee chairs
Assessing Candidates
Interviews, checks and approval.
→ Interview questions
→ Pre-offer checks
Every SMF search is led personally by Adrian Lawrence FCA
Frequently Asked Questions
Is an ex-FCA candidate more likely to be approved?
Not automatically. The regulator assesses everyone against the same standard, and will want to see evidence that the candidate can run the function, not just assess it.
Can a Big Four candidate hold an SMF without in-house experience?
Yes, but the firm needs to show the candidate has the competence and capability for personal accountability. Secondments, project leadership and decision-making experience all help.
Which background is best for a compliance officer at a small firm?
Usually an industry candidate who has run a function of similar size, because small firms need someone hands-on without a large supporting team.
Should we worry about conflicts when hiring from the regulator?
Check any post-employment restrictions and consider whether the candidate previously supervised your firm. Manage any perceived conflict openly and record how you did it.
Do Big Four candidates expect higher pay?
Often, yes, particularly at director and partner level. Benchmark against in-house roles of similar scope rather than the candidate’s current package.
Do you recruit from all three backgrounds?
Yes. Our searches routinely include candidates from regulators, advisory firms and industry, and we help boards compare them fairly.
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, including Accountancy Capital. He leads every SMF Capital search personally and regularly shortlists candidates from regulatory, advisory and industry backgrounds for the same role. View Adrian’s ICAEW profile.
Looking for the Right Background?
Tell us about the role and the firm, and we’ll help you decide which background fits, then find candidates who can be approved. We’ll come back to you the same working day.
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.
