Part-Time Compliance Officer for Small FCA-Regulated Firms
Small regulated firms face the same core compliance obligations as large ones, with a fraction of the budget. A part-time compliance officer gives a smaller firm experienced, approved compliance leadership for an agreed number of days a week, holding the SMF16 Compliance Oversight function with full personal accountability. SMF Capital recruits part-time compliance officers for directly authorised IFAs, wealth managers, brokers, consumer credit firms, payments firms and other smaller FCA-regulated businesses, with every search led personally by a Chartered Accountant.
The Compliance Officer Role at a Small Firm
Under the Senior Managers and Certification Regime, most Core and Enhanced FCA firms must have someone approved for the Compliance Oversight function, SMF16. That person is responsible for the firm’s compliance function and for reporting to the board on it. The rules are set out in the FCA’s SYSC 6.1, which requires firms to have an adequately resourced compliance function, and the regime itself in SUP 10C. The FCA’s guidance on the SMCR for solo-regulated firms explains which functions apply to each type of firm.
At a small firm, the compliance officer is often the single most important control. They write and run the compliance monitoring plan, keep policies up to date, oversee financial promotions and complaints, manage regulatory reporting and returns, implement new rules such as the Consumer Duty, and act as the firm’s main point of contact with the FCA. Many also hold the MLRO role. Our guide to who can be your MLRO or compliance officer answers the questions smaller firms ask most.
Outsourced Compliance Support vs an Outsourced Compliance Officer
Small firms often ask whether they can simply outsource compliance to a consultancy. The answer depends on what is being outsourced.
| Can it be outsourced? | What that means | |
|---|---|---|
| Compliance tasks | Yes | Monitoring reviews, file checks, financial promotion approvals, policy drafting and training can all be carried out by an external provider |
| The SMF16 role | Only to an individual who is approved | The compliance officer must be a named individual approved by the FCA, who is accountable for the function. They can be a part-time or contracted individual rather than an employee |
| Accountability | No | The firm and its Senior Managers remain responsible for compliance, whoever does the work |
A common and effective model for small firms is a part-time compliance officer who holds SMF16 personally, supported by outsourced monitoring or file-checking where volumes justify it. That gives the firm an accountable, approved individual who knows the business, with external resource for the routine work. Our guide to what you can and can’t outsource explains the principles in detail.
How Many Days Does a Small Firm Need?
There is no fixed rule, and the FCA will expect the firm to justify its choice. As a starting point:
| Firm profile | Typical commitment |
|---|---|
| Small advisory firm or IFA with a stable client base and simple products | Half a day to one day a week, often with outsourced file checks |
| Wealth manager, discretionary investment manager or broker | One to two days a week |
| Consumer credit firm with retail customers | One to two days a week, more during Consumer Duty or complaints work |
| Payments, e-money or cryptoasset firm | Two to three days a week, often combined with the MLRO role |
| Firm under remediation or supervisory scrutiny | Usually an interim, near full-time, until issues are resolved |
These are only indications. The right figure depends on the firm’s products, customers, volumes, complaints, distribution model and the support available. Our guide to fractional or full-time compliance officers covers the decision in more depth.
How We Recruit a Part-Time Compliance Officer
- Agree the scope. We start with your permissions, products and customers, and agree a realistic time commitment and whether the role includes SMF17.
- Search the right pool. We approach experienced compliance officers working on a portfolio basis, and senior compliance professionals moving into part-time work, prioritising your sector.
- Test capacity. We check each candidate’s other commitments, how they would handle urgent issues and whether they can meet your time requirement.
- Fit and proper pre-assessment. We check approvals, references and history against the fit and proper test before the shortlist.
- Personal interviews. Adrian Lawrence FCA interviews every shortlisted candidate.
- Terms and approval. We help agree terms and support the Form A and Statement of Responsibilities.
What to Look For
- Previous SMF16 approval, or substantial experience deputising for a compliance officer
- Direct experience of your type of firm, whether advice, investment management, consumer credit, insurance distribution or payments
- Practical knowledge of the Consumer Duty, financial promotions, complaints handling and regulatory reporting
- A risk-based compliance monitoring plan they can show you
- Experience of FCA contact, including supervisory visits or information requests
- The ability to explain compliance to a small board in plain terms
- Where needed, the experience to hold SMF17 as well
Scenario: A directly authorised financial planning firm with eight advisers has relied on a director to act as compliance officer alongside a full client bank. After a thematic review raises questions about its advice files, the board decides it needs specialist leadership but can’t justify a full-time salary. We agree one day a week plus quarterly outsourced file reviews. We shortlist three experienced compliance officers from advice firms, and the firm appoints one who is approved as SMF16, introduces a risk-based monitoring plan and reports to the board quarterly.
Sectors We Cover
We recruit part-time compliance officers across the smaller end of the regulated market, including wealth management, investment managers, consumer credit, insurance intermediaries, payments and fintech and crypto-assets. For firms leaving an appointed representative network to become directly authorised, see our guide to the Senior Managers you’ll need.
Cost and Contract Terms
Part-time compliance officers are usually engaged on a day rate or monthly retainer. For many small firms, the total cost is a fraction of a full-time salary while giving access to a more experienced individual than the firm could otherwise afford. Our salary guide gives current benchmarks. The agreement should set out the minimum time commitment, availability outside agreed days, access to records and the board, cover for absence and notice periods. Our guide to fractional SMF agreements covers each point.
When a Small Firm Outgrows Part-Time Compliance
Part-time arrangements suit many firms for years, but growth changes the picture. Signs that a firm needs more compliance time include rising complaint volumes, new products or distribution channels, a move from Core to Enhanced status, significant regulatory change, or a compliance officer who is consistently working well beyond the agreed days. We stay in touch with clients after an appointment, so when the time comes to add a deputy or recruit a full-time compliance officer, the transition is planned.
Compliance Officer Recruitment for Small Firms
Approved compliance leadership at a proportionate cost. Every compliance search is led personally by Adrian Lawrence FCA
Compliance Hiring
Every way to fill SMF16.
→ Compliance officer (SMF16)
→ Interim compliance officer
Smaller Firms
Guidance for small boards.
→ Who can be your compliance officer?
→ Fractional or full-time?
Firm Stages
As your firm changes.
→ Going directly authorised
→ Becoming an Enhanced firm
Every compliance search is led personally by Adrian Lawrence FCA
Frequently Asked Questions
Can a small firm have a part-time compliance officer?
Yes. Many small FCA-regulated firms have a part-time compliance officer, provided the time commitment is adequate for the firm’s size and risks.
Does the compliance officer have to be an employee?
No. The SMF16 holder can be engaged on a part-time or contract basis, but must be an individual approved by the FCA and accountable for the function.
Can we outsource compliance completely?
You can outsource compliance tasks, but not accountability. Someone must hold SMF16 and be responsible for the function.
Can the same person be our MLRO?
Often, yes. Small firms frequently combine SMF16 and SMF17, provided the person has the experience and time for both.
How quickly can you shortlist?
Usually within two to three weeks, because many part-time compliance officers are available without long notice periods.
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. View Adrian’s ICAEW profile.
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