Head of Compliance Recruitment for FCA-Regulated Firms

Head of Compliance Recruitment for FCA-Regulated Firms

Exec Capital recruits Heads of Compliance — SMF16 holders — for FCA-regulated firms across the UK. SMF16 is the designated senior management function that attaches personal regulatory accountability to the individual responsible for the firm’s compliance function under SMCR. The mandate covers the full range of compliance leadership: oversight of the firm’s regulatory obligations, management of the compliance monitoring programme, acting as the primary FCA relationship holder, and providing compliance assurance to the Board and Audit and Risk Committees. At smaller Core firms the SMF16 holder often also carries the MLRO designation (SMF17); at larger Enhanced firms the two functions are separated and separately approved.

If you are appointing an SMF16 — replacing an outgoing Head of Compliance, establishing the function for the first time ahead of FCA authorisation, or upgrading the seniority of compliance leadership as the firm scales — we are happy to discuss the specifics directly. Every SMF16 mandate is led personally by Adrian Lawrence FCA.

What an SMF16 Head of Compliance appointment involves

SMF16 is the FCA designation that attaches personal regulatory accountability to the individual responsible for the firm’s compliance function under the FCA’s Senior Managers and Certification Regime. The designation applies across all firm classifications — Core, Enhanced, and Limited Scope — though the expected seniority of the SMF16 holder and the scope of the compliance function differ materially across the range.

At Core firms, SMF16 is frequently combined with the MLRO function (SMF17) and the individual leads a small compliance team or operates as a sole compliance professional. At Enhanced firms, the two designations are held separately, the compliance function is staffed to meaningful depth, and the SMF16 holder’s role is substantially one of leadership and Board-level assurance rather than day-to-day monitoring. The FCA’s expectation for both is that the SMF16 holder has genuine authority over the compliance function — not simply a reporting line — and the resource to fulfil the programme of monitoring, testing, training and reporting the function requires.

The formal responsibilities of the SMF16 holder flow from the firm’s obligations under the FCA SYSC sourcebook, the Conduct of Business rules applicable to the firm’s permission set, and the SMCR Statement of Responsibilities assigned to the individual. Where the firm is an Enhanced firm, the responsibilities map must explicitly allocate each material regulatory obligation to a named SMF; SMF16 typically carries the broadest compliance-facing obligations on the map.

For the comprehensive treatment of how to approach an SMF16 appointment, see our SMF16 Head of Compliance hiring guide.

How Exec Capital approaches SMF16 mandates

The substantive search for an SMF16 appointment requires a precise understanding of the firm’s regulatory permission set, its enforcement or supervision history with the FCA, the structure of the compliance function, and whether the appointment is permanent, interim or — where firm size permits — fractional. These factors determine both the candidate specification and the pool we draw from. We do not run SMF16 searches as generic compliance recruitment exercises.

We structure SMF16 mandates around three workstreams. First, candidate identification: the pool of SMF16-approved individuals with relevant sector experience is finite and largely employed, which means most searches require active outreach rather than response management. Second, regulatory pathway preparation: SMF16 approval via FCA Form A is substantive, and candidates without prior SMF approval require structured preparation across the fit-and-proper assessment, Statement of Responsibilities, and regulatory references process. Third, scope alignment: the compliance function the candidate is joining must be resourced proportionately to the obligations they will be personally accountable for — we raise this as part of the mandate rather than after appointment.

We work on a retained basis for SMF16 mandates. For firms appointing the compliance function for the first time — frequently in the context of FCA authorisation or an FCA-required management changes programme — the mandate includes an initial scoping conversation to establish appropriate seniority and scope before search begins.

The candidate pool

The SMF16 candidate pool divides into three broad segments, each relevant to a different type of mandate.

Currently approved SMF16 holders are the primary search pool for most mandates. These candidates have existing FCA approval, active regulatory references, and direct familiarity with the personal accountability the role carries. The pool of actively moveable SMF16 holders with any given sector combination is typically fewer than twenty individuals nationally — which is why most successful appointments require direct outreach rather than advertising.

Senior compliance professionals below SMF level represent the step-up pool. Deputy Heads of Compliance, Heads of Compliance Monitoring, and Senior Compliance Managers at larger regulated firms are natural candidates for a first SMF16 appointment, particularly at Core firms or firms undergoing initial FCA authorisation. The FCA’s fit-and-proper assessment of this group focuses heavily on breadth of regulatory knowledge and demonstrable advisory influence at Board or ExCo level.

Compliance professionals from adjacent regulated environments — including legal firms with FCA permission sets, insurance intermediaries, and payment institutions — are relevant for firms whose permission set maps well to those sectors. The FCA does not require sector-identical experience for SMF16 approval, but the assessment of regulatory knowledge is thorough and candidates from adjacent environments require careful preparation of their Form A narrative.

The candidate pool overlaps significantly with the SMF17 MLRO candidate pool at smaller Core firms, particularly where the two designations are held by the same individual. Candidates who hold dual SMF16 and SMF17 approval are relatively rare and command a material premium over single-function approved candidates.

Permanent, interim and fractional appointments

The majority of SMF16 mandates are permanent appointments. The personal accountability that attaches to the designation and the continuity required to maintain the compliance programme make permanent appointment the natural default, and the FCA expects to see a substantive individual in the SMF16 seat rather than a revolving interim function.

Interim SMF16 arrangements arise in defined circumstances: a departing Head of Compliance where no successor is ready for FCA approval; an enforcement-related management change requiring immediate replacement; or a period during which the permanent appointment process is running but the compliance function cannot be left without designated SMF coverage. Interim arrangements require the same FCA approval as permanent appointments — an unapproved individual cannot perform the SMF16 function even on an interim basis without a formal change of control or variation of permission application. Firms planning SMF16 successions must treat the FCA approval timeline as the binding constraint on the interim period.

Fractional SMF16 arrangements are viable for smaller Core firms where the volume of compliance activity does not justify a full-time appointment. The FCA does not prohibit part-time or portfolio SMF16 holders, but the individual’s availability must be demonstrably sufficient for the scope of their compliance function. Firms operating with a fractional SMF16 are at heightened scrutiny risk if the compliance programme shows gaps attributable to capacity. We advise on appropriate scope-setting for fractional arrangements as part of the mandate. See our Fractional Compliance Officer page for more on this model.

Indicative timelines

The realistic timeline for a clean SMF16 appointment runs to ten to sixteen weeks from search opening to first day, assuming the candidate has prior FCA approval and the firm’s regulatory references position is straightforward. Where the candidate requires a first-time Form A submission, the FCA’s approval process adds a further six to twelve weeks — the FCA’s current target for processing Form A applications is twelve weeks, though this varies with submission complexity and the FCA’s supervisory interest in the appointing firm.

Firms with active FCA engagement — including those subject to skilled person reviews, voluntary requirements, or prior enforcement action — should expect extended processing and more substantive FCA questioning of the candidate’s Form A. We build this into the search timeline and prepare candidates accordingly. For the FCA’s published guidance on the approval process, see the FCA’s Form A application guidance.

Boards planning SMF16 succession — including where a departing Head of Compliance has given notice — should treat the FCA approval timeline as non-compressible and begin the search as early as practicable after the vacancy is confirmed.

Sectors and firm types we work across

Our SMF16 mandates span the full FCA-regulated firm population subject to SMCR: asset managers and wealth managers across the AUM range, insurance intermediaries and brokers, payment institutions and e-money firms, consumer credit lenders, financial promotions intermediaries, and specialised investment firms. The compliance function’s scope — and therefore the candidate specification — differs materially across these sectors.

Asset management firms require SMF16 candidates with direct FCA COLL, COBS and AIFMD experience. Payment institutions and e-money firms require familiarity with PSR, PSD2 and DORA obligations. Consumer credit lenders require depth in CONC and Consumer Duty implementation. We match the candidate specification to the firm’s actual permission set rather than treating the SMF16 designation as sector-agnostic.

The introduction of the FCA Consumer Duty (effective July 2023, with ongoing implementation requirements across retail-facing firms) has materially increased the scope of the SMF16 function. Many firms are finding that their existing Head of Compliance’s bandwidth is insufficient for both the standing monitoring programme and the Consumer Duty Board report obligations — this is the most common trigger for SMF16 mandates we are currently seeing.

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

Working with Exec Capital on an SMF16 mandate

Every SMF16 mandate is led personally by Adrian Lawrence FCA. The compliance function sits at the intersection of regulatory obligation, operational risk management and Board governance — a combination that benefits from a search lead who understands all three dimensions. As a Fellow of the ICAEW with substantial experience in regulated environments, Adrian engages with compliance mandates at the level of regulatory substance rather than job description, which changes both the quality of the candidate conversation and the Board’s understanding of what the role actually requires.

For firms uncertain whether their existing compliance function is appropriately structured before committing to a mandate, we offer an initial structured conversation — free of obligation — that walks through the firm’s permission set, the function’s current scope and resource, the FCA’s typical expectation for that firm classification, and what the right candidate profile would look like. This frequently identifies that the role needs repositioning before search begins, either in seniority or scope.

For the related compliance and risk mandates that sit alongside the SMF16 function, see our SMF17 MLRO Recruitment and CRO Recruitment pages.

Further reading

For the complete treatment of SMF16 appointments — including the compliance function scope, the FCA’s fit-and-proper expectations, the Form A process, the integrated Statement of Responsibilities, and common appointment pitfalls — see our SMF16 Head of Compliance hiring guide. For the broader SMCR framework, see our SMF Roles guide.

For the related compliance designation frequently held alongside SMF16 at smaller firms, see our SMF17 MLRO Recruitment page. For the risk function that typically partners the compliance function at Board level, see our CRO Recruitment page and SMF4 CRO hiring guide.

For the FCA’s published guidance on SMCR and the compliance function, see the FCA’s SMCR overview and FCA finalised guidance FG20/1 on the compliance function — the FCA’s own definitive statement of what a properly functioning compliance regime requires.