Executive Director Recruitment for FCA-Regulated Firms

Executive Director Recruitment for FCA-Regulated Firms

Exec Capital recruits Executive Directors — SMF3 holders — for the Boards of FCA-regulated firms across the UK. The role is the executive seat on the Board that is not the CEO: typically the COO who attends as an executive director, the CFO who has been allocated to the Board with SMF3 (where they do not also hold SMF2), the Chief Commercial Officer with executive Board membership, the CIO in asset management firms, or the founder-director in firms where the founder is not in the SMF1 seat. Each of these patterns is a distinct search, but all share the SMF3 designation and the dual nature of the role: executive responsibility for a defined area of the firm combined with Board membership and the corresponding governance accountability.

If you are appointing an SMF3 — replacing an outgoing executive director, formalising an existing senior executive into the SMF3 designation, or appointing a new executive to the Board for the first time — we are happy to discuss the specifics directly. Every SMF mandate is led personally by Adrian Lawrence FCA.

What an SMF3 Executive Director appointment involves

SMF3 is the FCA designation that attaches personal regulatory accountability to executive directors who sit on the Board of an FCA-regulated firm but are not the CEO. The substantive scope covers the dual nature of the role — executive responsibility for a defined area of the firm combined with Board membership and the corresponding governance accountability. Both halves carry personal accountability under SMCR.

The most common pattern in mid-sized regulated firms is that SMF3 stacks with another executive SMF designation. A COO on the Board typically holds SMF3 plus SMF24; a CFO on the Board may hold SMF3 plus SMF2 (where SMF2 applies); a CRO on the Board may hold SMF3 plus SMF4. The Statement of Responsibility for that individual covers all the SMFs they hold, and FCA approval covers all the functions the candidate will perform.

For the comprehensive treatment of how to approach an SMF3 appointment, see our SMF3 Executive Director hiring guide.

How Exec Capital approaches SMF3 mandates

The substantive search for an SMF3 appointment depends on the executive role attached to the SMF3 designation. A COO + SMF3 + SMF24 search is run primarily as a senior operational leadership search, with the SMF3 dimension and SMF24 dimension layered on top. A CFO + SMF3 + SMF2 search is run primarily as a senior finance leadership search. A standalone SMF3 (without a stacked executive SMF) is run as a senior executive director search with a focus on Board contribution alongside the executive area.

Across all patterns we structure SMF3 searches around three workstreams: candidate identification with relevant prior SMF experience first, regulatory pathway preparation (Form A submission readiness, fit-and-proper assessment, regulatory references), and the governance dimension (integrated Statement of Responsibility covering all SMF designations the candidate will hold, alignment with the responsibilities map, working relationship with the Chair and CEO).

The candidate pool

The SMF3 candidate pool varies significantly by the executive role attached to the designation. Three broad pools recur across our SMF3 mandates. Senior executives at peer regulated firms — the most common pool — are candidates currently holding the equivalent role at another regulated firm of similar classification, with prior FCA approval and direct sector experience. Below-Board executives at larger regulated firms are the natural step-up pool — heads of operations, heads of finance, senior commercial leaders whose roles do not currently include Board membership but whose seniority justifies it at a smaller firm. Corporate executives without prior SMF approval can be credible with structured preparation, particularly from financial services-adjacent industries — fintech, payments, insurance technology.

The pool is broader than for SMF1 but the FCA assessment is substantive. Where the SMF3 stacks with another SMF designation, the competence assessment for the stacked function is the more substantive part of the review — meaning the candidate’s depth in the executive role (operational, financial, risk) typically dominates the assessment.

Permanent, interim and fractional appointments

SMF3 appointments are most commonly permanent — the role is structurally part of the firm’s executive Board, and continuity matters. Interim arrangements occur during transitions, particularly where an executive is being replaced and an interim covers the gap until the permanent appointment can be FCA-approved. Fractional SMF3 arrangements are uncommon — the Board membership dimension does not naturally lend itself to a part-time engagement — but they exist in smaller Core firms where the operational reality supports a defined day-per-week commitment.

For all engagement models, FCA approval is required regardless of how many SMF designations the candidate will hold. Where SMF3 stacks with another executive SMF, the approval covers all functions in a single submission.

Indicative timelines

The realistic timeline for a clean SMF3 appointment runs to twelve to twenty weeks from search opening to first day. Where SMF3 stacks with another SMF designation, the FCA approval can take slightly longer than for a single function because the assessment is broader, but the process is unified rather than sequential. Boards planning succession at executive director level should build the FCA timeline into their planning rather than expecting to compress it at the back end.

Sectors and firm types we work across

Our SMF3 mandates span the FCA-solo-regulated firm population — including asset managers and wealth managers across the AUM range, insurance intermediaries and broker-dealers, fintechs and payment institutions, consumer credit lenders, and specialised investment firms. Asset management firms in particular often have multiple SMF3 holders on the Board (CIO, CFO, COO all attending as executive directors), which can mean SMF3 succession planning needs to be coordinated across several roles rather than treated as standalone appointments.

For the broader FCA-regulated firm cluster, see our FCA Regulated Firm Executive Recruitment hub. For the SMF Roles overview, see our SMF Roles guide.

Working with Exec Capital on an SMF3 mandate

Every SMF3 mandate is led personally by Adrian Lawrence FCA. The role’s dual nature — executive responsibility plus Board membership — means it benefits from someone running the search who understands both dimensions, and as a Fellow of the ICAEW with substantial regulated-firm executive experience, Adrian brings that perspective directly. We work on a retained basis for SMF3 appointments where the search is for a primary executive role; for appointments that are substantially refreshes of existing senior executives into formal SMF3 designation, the engagement is typically lighter.

For boards considering whether an existing senior executive should formally take the SMF3 designation, we offer a structured initial conversation that walks through the responsibilities map, the role specification and the FCA approval pathway before any formal mandate begins.

Further reading

For the complete treatment of SMF3 appointments — including the SMF1/SMF3 distinction, the typical stacking patterns, the FCA approval process, the integrated Statement of Responsibility, and common search pitfalls — see our SMF3 Executive Director hiring guide. For the broader SMCR framework, see our SMF Roles guide.

For the related executive functions that often stack with SMF3, see our SMF24 Chief Operations Function hiring guide and SMF4 CRO hiring guide. For the FCA’s published guidance, see the FCA’s SMCR overview.