Hiring Into a Senior Manager Function: What the Approval Gate Changes

Executive search at an FCA-regulated firm runs to a different clock, and the single most common planning error is treating a senior manager appointment like any other hire. The offer is accepted, a start date goes in the diary, and then somebody discovers that the person cannot actually hold the role until the regulator has approved them.

That gap between offer and start is where regulated searches go wrong. It is also entirely manageable, provided it is built into the plan at the beginning rather than discovered in week ten of a notice period.

This piece covers what changes about a search when the role is a controlled function, which seats are affected, and how boards should sequence appointments so the timetable survives contact with reality.

Approval Is a Gate, Not a Formality

A senior manager function cannot be held until the FCA has approved the individual for that specific role at that specific firm. The application is assessed on fitness, propriety and competence, not processed on receipt, and the regulator may come back with questions or request an interview.

Three consequences follow for the search itself.

The offer-to-start period is measured in months rather than weeks, and it runs alongside rather than inside the notice period if the application is submitted late. The firm cannot simply put the person in the seat on an acting basis and regularise it later. And until approval lands, the appointment is not certain, which changes how both parties behave in the interim.

Our view is that the application should be prepared while the offer is being negotiated, not after it is signed. Firms that wait until the contract is returned routinely lose four to six weeks for no reason. FD Capital’s guides on how long FCA senior manager approval takes and the Form A application guide are the clearest statement of what the timetable actually looks like.

Counter-Offers Behave Differently

In an unregulated search, the risk window closes when the candidate resigns. In a regulated one it stays open considerably longer, because there is a stretch of weeks or months during which the candidate has accepted, resigned, and is not yet able to start.

That is a long time to stay engaged with a firm they have not joined, and it is ample time for a current employer to improve its offer or for another approach to land. The practical answer is contact rather than paperwork: a structured sequence of conversations with the hiring executive and the board through the approval period, so the candidate is already part of the firm socially before they are part of it formally.

It is also worth being candid with candidates about the timetable at first interview. A candidate who understands in week one that they will not start for four months is a candidate who has planned for it. One who finds out at offer stage frequently re-opens the whole decision.

Candidates Are Assessing Regulatory Risk, Not Just the Package

This is the part firms most often underestimate. Someone taking a senior manager function is accepting personal accountability for an area of the business, assessed on whether they took reasonable steps. They are not evaluating the salary in isolation; they are evaluating how exposed they will be.

So the questions that decide a regulated search are rarely about money. They are about whether the function is adequately resourced, whether the board understands what it is asking for, whether there is an open supervisory matter, and why the previous holder left. Firms that answer those well compete on the terms candidates actually care about. Firms that deflect them end up competing on salary alone, which is both expensive and ineffective.

Our SMF salary guide is a useful calibration on the money side, so that conversation can be settled quickly and the search can move on to the things that will decide it.

The Order You Appoint In

At firms going through authorisation or rebuilding a governance structure, sequence matters more than speed.

The governing body comes first. A firm without a credible chief executive and board cannot sensibly recruit the functions that report into them, and candidates for control functions will ask who they would be reporting to. Exec Capital covers that tier — our SMF salary guide and related guides set out the approval-tier board roles.

The control functions follow, and they are usually the harder appointments because the candidate population is narrower. Compliance Oversight and the MLRO function are the two that most often stall a timetable.

Non-executive and committee appointments can run in parallel, and frequently should, because a board that is still forming is a weaker proposition to an executive candidate than one that is complete.

The Two Seats That Stall Timetables

In our experience the appointments most likely to put a regulated hiring plan behind schedule are the compliance functions, for reasons that are structural rather than circumstantial.

SMF16 is the Compliance Oversight function. The candidate pool at smaller firms is narrower than firms expect, partly because the role at a twenty-person firm is hands-on in a way the job description usually fails to describe.

SMF17 is the Money Laundering Reporting Officer. The approval attaches to a named individual, cover arrangements are thin at most firms, and an unplanned departure turns into an urgent problem quickly.

Where a firm intends one person to hold both, the combined fractional SMF16/17 appointment is a well-established structure at smaller firms — but the genuinely dual-capable population is small, because conduct and financial crime careers separate early and the market rewards depth rather than breadth. That is worth knowing before the brief goes to market rather than after six weeks of thin applications.

FD Capital handles those three appointments across the group. Exec Capital covers the executive and board tier around them.

Interim Cover Is Part of the Plan

Firms treat interim appointments as an admission that the permanent search has failed. At regulated firms that framing is simply wrong, because the approval gate guarantees a period during which the seat is either empty or filled by somebody else.

Planning for cover from the start has two benefits. It removes the pressure that produces rushed permanent appointments, which are the most expensive hires available because the firm repeats the exercise eighteen months later. And it means the permanent search can be run properly rather than against a deadline set by someone else’s resignation.

Fractional C-suite appointment is the usual route for executive roles where the requirement is genuine but not full-time, and the same logic applies on the control-function side.

What to Put in the Timetable

For any regulated executive search, we would build the plan backwards from the date the role must be filled, with five dates in it rather than two.

Search launch. Offer accepted. Application submitted — which should be days after the offer, not weeks. Approval received. Start date. The gap between the third and fourth is the one nobody controls, and it is the reason the other four need to be earlier than instinct suggests.

Add to that an honest answer on who holds the function in the interim, and the plan survives most of what the process throws at it.

How We Work With Firms on This

Most regulated mandates we see involve more than one seat, and the brands in the group divide along the obvious line: Exec Capital for the executive and board tier, FD Capital for the compliance and senior manager functions that sit alongside them. The benefit of running both through one group is that the sequencing conversation happens once, with people who can see the whole structure, rather than three times with three agencies working to three different timetables.

If you are building a governance structure from scratch, or replacing a function at short notice, we are happy to map the timetable before anything goes to market. It generally takes half an hour and it is the cheapest intervention available in a regulated search.

Adrian Lawrence

Adrian Lawrence FCA is the founder of Exec Capital. He is a Chartered Accountant and holds an ICAEW practising certificate in his own name with over 25 years’ experience operating at C-suite level, Adrian brings direct executive experience to senior search. His background spans private equity-backed businesses, owner-managed companies, and listed environments, giving Exec Capital a practitioner’s understanding of what leadership hires actually require.