Fractional and Interim SMF Cover

What Fractional SMF Cover Is

A fractional Senior Manager is an experienced 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 a Senior Manager 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, have a statement of responsibilities, and answer to the regulator for their area.

Most fractional Senior Managers 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. Interim cover is the short-term counterpart: a full or near full-time appointment for a defined period, usually to fill a sudden gap.

The model suits firms that need a genuine Senior Manager but not a full-time one. 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;
• payments, e-money and crypto-asset firms in their first years after authorisation or registration;
• firms applying for authorisation that need Senior Managers named in the application; and
• appointed representatives leaving a principal to become directly authorised.

The SMF Roles We Fill on a Fractional or Interim Basis

Each appointment needs FCA approval at each firm. A fractional Senior Manager working for three firms needs three approvals, and the FCA will look at their other commitments each time. Our guide to holding more than one SMF explains how combinations work within a single firm.

Fractional, Part-Time, Outsourced or Interim SMF Cover?

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

Whichever route you choose, the regulatory responsibility 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 when interim and fractional appointments work covers where the model succeeds and where it creates risk.

Fractional Compliance Officer (SMF16)

SMF16 Compliance Oversight is the most common fractional SMF and the one most of our clients ask for first. A fractional SMF16 runs the compliance monitoring programme, reports to the board on compliance risk, advises the business on products and financial promotions, supports the board on Consumer Duty and manages breach reporting, typically for one to three days a week. Our dedicated fractional compliance officer (SMF16) page covers the role, the days firms need, what to look for and how we run the search.

Fractional MLRO (SMF17)

A fractional MLRO holds SMF17 and, in most firms, acts as nominated officer, receiving internal suspicious activity reports and deciding whether to report them to the National Crime Agency. Because those decisions cannot wait, a fractional MLRO needs a clear arrangement for the days they are not working, usually a trained deputy or an agreed response time. Our dedicated fractional and part-time MLRO recruitment page covers the role in detail, including what payments, crypto and wealth firms expect.

Combined SMF16 and SMF17

Many smaller firms appoint one fractional person as both compliance officer and MLRO. This is permitted, and it is common where financial crime risk is modest, giving the firm a single point of accountability for compliance and money laundering reporting. The person must have genuine financial crime experience as well as conduct compliance, and enough time for both. As a firm grows, or its risk rises, splitting the roles usually becomes the better answer. See combined compliance officer and MLRO recruitment and when to split a combined SMF16/SMF17 role.

Fractional Finance Director and Executive SMFs

Smaller regulated firms often need board-level finance oversight without a full-time CFO. A fractional finance director can hold SMF2 Chief Finance Function, own regulatory capital and reporting, and work alongside the compliance officer on returns such as ICARA for investment firms. See our chief financial officer (SMF2) recruitment page. We also place experienced executive directors (SMF3) on a part-time basis to strengthen a thin board, often during authorisation.

Fractional Senior Managers carry personal exposure under the Senior Manager Conduct Rules and the duty of responsibility, so whatever the function, they need to be able to show they took reasonable steps across all of their appointments, not just the busiest one.

Days, Terms and Costs

There is no rule that sets a minimum time commitment for a Senior Manager. The FCA’s test is whether the person has enough time and resources to do the role properly, and it looks at their other appointments and the firm’s risk profile when it reviews the Form A. Fractional Senior Managers are usually engaged on a day rate or a monthly retainer, through their own company or as a direct contractor, with agreed days, availability for urgent issues and a notice period long enough to appoint a successor.

Our guides to how many days a fractional MLRO or compliance officer needs, what a fractional SMF agreement should cover and what SMF roles actually pay set out the detail, and we will give you a realistic rate for your function, sector and days when we take the brief.

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

When a Senior Manager 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.

How We Run a Fractional SMF 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 Senior Managers 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 Fractional Cover

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 Senior Manager will help you plan the handover.

Frequently Asked Questions

Can a fractional Senior Manager hold an SMF?

Yes. There is no requirement for SMF16, SMF17 or most other functions 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 Senior Manager work for?

There is no fixed limit, but they need FCA approval at each one. Most experienced fractional Senior Managers 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 fractional SMF cover the same as outsourcing?

Not quite. A fractional Senior Manager 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 one fractional person be our compliance officer and 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 Senior Manager?

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.