Why Firms Combine the Two Roles

Compliance oversight and money laundering reporting are separate Senior Manager Functions with separate responsibilities, but they draw on overlapping knowledge, report to the same board and often rely on the same small team. For a firm with a modest customer base and a straightforward business model, two senior appointments can be more than the risks require. Combining them gives the firm one accountable, approved individual who sees the whole regulatory picture, from conduct and Consumer Duty to customer due diligence and suspicious activity reporting.

The FCA accepts combined appointments where they are proportionate. What it will not accept is a combination that leaves either function under-resourced or held by someone who is strong in one discipline and weak in the other. Our guide to SMF16 and SMF17 explains each function in detail, and our article on whether one person can hold more than one SMF covers the general principles. This page is about recruiting the person who will hold both.

Combine or Split? A Practical Test

Before we start a combined search, we look at whether combining is the right answer for the firm. These are the questions we work through with the board:

If most answers point towards combining, a single SMF16 and SMF17 holder is usually the most effective structure. If several point towards splitting, we’ll say so, and recruit a separate compliance officer and MLRO instead.

The Candidate Profile: Genuinely Dual-Skilled

The hardest part of a combined search is that most compliance professionals lean one way. Some come up through conduct and regulatory compliance and have only supervised financial crime. Others are financial crime specialists who have never owned a compliance monitoring plan or a Consumer Duty assessment. A credible combined holder has real, recent experience of both. We look for:

Because candidates rarely present themselves as “combined” specialists, we test both sides explicitly at interview, using scenario questions on compliance monitoring and on financial crime judgement. Our guides to the compliance experience that matters by firm type and MLRO interview questions show the ground we cover.

How the Regulator Assesses a Combined Appointment

When a firm applies for one person to hold both functions, the FCA looks at the combination as well as at the individual. In our experience its questions focus on:

• Competence in both areas. The candidate is assessed against the fit and proper test for each function. A strong compliance background will not make up for thin financial crime experience, or the other way round.
• Time. Whether the hours available are realistic for both functions together, especially if the appointment is part-time.
• Independence and challenge. Whether the MLRO’s financial crime decisions could be compromised by other duties, and whether the combined holder can challenge the business on both fronts.
• Cover. Who acts if the holder is absent, particularly for urgent suspicious activity decisions.
• Clarity. Whether the Statement of Responsibilities sets out each function’s responsibilities clearly, rather than merging them into a single vague description.

The rules behind both functions sit in the FCA Handbook: SYSC 6.1 for the compliance function and SYSC 6.3 for financial crime and the MLRO, alongside the Money Laundering Regulations 2017.

Full-Time, Fractional or Interim

A combined compliance officer and MLRO can be appointed on any basis. The right one depends on the firm’s size and situation:

For part-time appointments, the time commitment is the point the regulator questions most. Our guide to how many days a week a fractional MLRO or compliance officer needs sets out how to size it and document the rationale.

How We Run a Combined SMF16 and SMF17 Search

• Test the structure. We confirm with the board that combining is proportionate, using the combine-or-split questions above.
• Define both sets of responsibilities. We agree a draft Statement of Responsibilities that sets out SMF16 and SMF17 separately, plus the time commitment and support available.
• Search for dual experience. We approach people who have held both functions, or held one and deputised formally for the other, in your sector.
• Test both disciplines. Every candidate is interviewed on compliance monitoring and on financial crime judgement, and assessed against the fit and proper test for both functions.
• Personal interviews. Adrian Lawrence FCA interviews every shortlisted candidate.
• Application and cover. We support the approval application for both functions and help the firm document cover arrangements for absences.

Sectors Where Combined Roles Are Most Common

We recruit combined compliance officers and MLROs most often for wealth managers and advice firms, investment managers and brokers, consumer credit firms, payments and e-money firms and cryptoasset businesses. Each sector weights the two disciplines differently. An advice firm’s combined holder spends most of their time on conduct and Consumer Duty; a payments or crypto firm’s spends far more on financial crime. We match the candidate’s balance of experience to your firm’s balance of risk.

When a Combined Role Should Be Split

A combined appointment that suits a firm today may not suit it in two years. The signs that it is time to separate the roles include a sharp rise in alerts or complaints, new high-risk products or markets, a move from Core to Enhanced status, findings from internal audit or the FCA in either area, and a combined holder consistently working well beyond the agreed time. Planning for the split early, often by appointing a deputy MLRO or head of compliance monitoring first, makes the transition smooth. Our guide to becoming an Enhanced firm covers what changes, and our financial crime leadership page covers the team that supports an MLRO as the firm grows.

Pay for a Combined Role

Combined holders usually command more than a single-function compliance officer or MLRO at the same firm, reflecting the breadth of experience required and the personal accountability for two functions. Fractional combined holders are typically engaged on a day rate. Our SMF and compliance salary guide gives current benchmarks for both permanent and fractional arrangements.

Frequently Asked Questions

Can one person hold SMF16 and SMF17?

Yes, and it is common at smaller firms, provided the person has genuine experience in both disciplines and enough time and support to do both properly.

Does a combined holder need two approvals?

The individual must be approved for each function they will perform, and the Statement of Responsibilities should set out both clearly. We support the application for both.

Can a combined compliance officer and MLRO be part-time?

Yes. Many are fractional, working one to three days a week. The regulator will expect the time commitment to be justified by the firm’s risks and volumes.

Is it cheaper than hiring two people?

Usually, yes. A combined holder typically costs more than either single role but considerably less than two senior appointments.

How quickly can you shortlist?

Typically two to four weeks, depending on the sector and whether the role is full-time or fractional.