Hiring Senior Executives for Financial Services: A Complete UK Guide

Hiring a senior executive into a UK financial services firm is not the same exercise as hiring into an unregulated business. The commercial brief still matters — strategy, growth, cost, culture — but it sits alongside a second brief that the regulator effectively writes for you: who can hold the role, what they will be personally accountable for, how long approval will take, and how their pay can be structured. Boards that treat the regulatory side as paperwork to be completed after an offer is made tend to lose time, lose candidates, or end up with an appointment the regulator questions.

This guide is for chairs, chief executives, founders, investors and HR directors planning a senior hire at a bank, building society, insurer, asset or wealth manager, payments or e-money firm, or lender. It covers how the sub-sectors differ, how the Senior Managers and Certification Regime (SMCR) shapes the appointment — including the reforms that took effect in April 2026 and the further changes now proposed — where candidates come from, how to assess them, how pay and deferral rules affect the offer, and when interim or fractional cover is the better answer.

How the main sub-sectors differ

“Financial services” covers businesses with very different regulators, risk profiles and talent pools. The first job in any brief is to be precise about which part of the sector you are hiring into, because it decides which candidates are credible and which approval route applies.

Banking and building societies

Banks and building societies are dual-regulated: the Prudential Regulation Authority (PRA) supervises safety and soundness, and the FCA supervises conduct. Senior appointments here carry the fullest version of SMCR, with more prescribed functions, closer regulatory interest in the CEO, CFO, CRO and Chair, and remuneration rules that apply to material risk takers. Challenger banks add their own pressure: boards want leaders who can run a regulated balance sheet and also build a business at pace, and that combination is scarce.

Insurance and reinsurance

Insurers are also dual-regulated, while most brokers and intermediaries are FCA solo-regulated. Insurance has its own senior functions — the Chief Actuary (SMF20) and Chief Underwriting Officer (SMF23) among them — and the Lloyd’s market adds another layer of oversight for managing agents. Senior candidates are usually expected to have worked in the same line of business: life and pensions, general insurance and specialty or London market roles draw on distinct pools. Our insurance recruitment practice works across carriers, MGAs and brokers.

Asset and wealth management

Most asset managers, wealth managers and private client firms are FCA solo-regulated, typically under the MIFIDPRU prudential regime. The board will want leaders who understand investment process, distribution and client outcomes under the Consumer Duty, and who can run a firm where margins are under pressure and consolidation is common. For wealth firms in particular, the regulator’s focus on advice quality, fees and vulnerable customers means the CEO and Head of Compliance are tested on conduct as much as on growth. See our wealth management recruitment service for that end of the market.

Payments, e-money and fintech

Authorised payment institutions and e-money institutions are regulated by the FCA under the Payment Services Regulations and the Electronic Money Regulations rather than under the main SMCR framework. The FCA still assesses the people who direct and manage the business when a firm applies for authorisation and when key people change, and safeguarding and financial crime controls are areas of sustained supervisory attention. Many fintechs also hold other permissions (consumer credit, investment or banking) that bring them into SMCR, so the regulatory map needs checking firm by firm. Our fintech recruitment team handles leadership hires for scaling payments and technology-led firms.

Lending and credit

Specialist lenders, consumer credit firms, motor and asset finance providers and peer-to-peer platforms are generally FCA-regulated for their lending activities, and many fall within SMCR as core or limited-scope firms. Credit risk, collections, affordability and treatment of customers in financial difficulty are where senior judgement is most scrutinised. Leadership candidates who have run a loan book through a downturn are valued, and those with only growth-phase experience should be probed on how they would manage arrears and impairment.

SMCR and regulatory approval

For firms within SMCR, the most senior roles are Senior Manager Functions (SMFs). Holders of those functions need regulatory approval before they start, carry a Statement of Responsibilities setting out what they are accountable for, and are subject to the Conduct Rules and the duty of responsibility. For a board, that has three practical consequences. The candidate must be capable of being approved as fit and proper. The scope of the role must be defined clearly enough to write a Statement of Responsibilities. And the timetable must allow for the regulator’s decision. Our SMCR overview explains the framework in more detail.

What changed in April 2026

The first phase of SMCR reform took effect on 24 April 2026, through the FCA’s PS26/6 and the PRA’s corresponding policy statement, PS12/26. The changes were targeted rather than structural: they cover criminal record checks, the 12-week rule for temporary cover, Statements of Responsibilities and responsibilities maps, regulatory references, the Conduct Rules, prescribed responsibilities and the thresholds for enhanced firms. For hiring, the useful points are that criminal record checks stay valid for longer and are no longer needed when an existing SMF holder moves into another SMF role within the same group, and that firms responding to a regulatory reference request now have less time to do so. Some process changes followed in July and September 2026.

On timing, the FCA has set a target of deciding at least half of senior manager applications in 35 days or fewer, and has proposed cutting the statutory deadline for applications from three months to two. A target is not a guarantee: complex applications, dual-regulated appointments, Chair and CEO roles, and incomplete forms still take longer. Plan the start date around a realistic approval window, not the best case.

What is proposed next

The Financial Services and Markets Bill, introduced in Parliament in May 2026, proposes removing the Certification Regime from primary legislation and allowing the regulators to decide when a senior appointment can be notified rather than pre-approved. Both regulators consulted on their second phase of reforms in October 2026. The FCA’s CP26/37 proposes removing the Certification Regime and reducing the number of SMF applications, and the PRA’s CP14/26 proposes moving roughly half of its SMFs to a notification basis and extending temporary SMF cover from 12 to 18 weeks. These are proposals only. Both consultations close in January 2027, and implementation depends on the Bill passing. Until then, the current approval regime applies and boards should plan appointments on that basis.

Even if pre-approval is relaxed for some roles, the firm’s own fitness and propriety assessment will matter more, not less. A board that notifies an appointment rather than seeking approval is taking on the judgement the regulator used to make, and will need the evidence to show it was sound.

The roles boards most often need to fill

The senior team in a regulated firm is shaped partly by commercial need and partly by which functions the regulator expects to see. The roles that come up most often are:

• Chief Executive (SMF1). Sector experience and approvability are the starting point. The regulator will look closely at a first-time CEO, so the board needs a clear view of how the candidate’s gaps will be covered.
• Chief Financial Officer (SMF2). Responsible for financial resources and regulatory reporting, and in prudentially regulated firms for capital and liquidity.
• Chief Risk Officer (SMF4). Required in larger and dual-regulated firms. Independence from the business lines is the defining test of the role.
• Head of Compliance (SMF16) and MLRO (SMF17). Required at almost every SMCR firm. In smaller firms one person often holds both functions; in larger ones they are separate. See our Head of Compliance recruitment service.
• Chief Operations (SMF24). Increasingly senior because of operational resilience, outsourcing and technology risk.
• Chair (SMF9) and committee chairs. The independent board roles — Chair, Senior Independent Director, and chairs of the audit, risk, remuneration and nominations committees — carry their own approval and accountability.

Beyond the SMFs, General Counsel, Chief Technology Officer, Chief Commercial Officer and, in investment businesses, Chief Investment Officer roles are common. They may not need approval themselves, but their scope often overlaps with a Senior Manager’s responsibilities, and the responsibilities map has to make clear who owns what.

Where the candidates come from

The senior talent pool in financial services is deep in London and thinner elsewhere, and it is organised by sub-sector. Five sources come up repeatedly:

• Sitting executives at peer firms. The most direct fit and the hardest to move. They will often be holding unvested deferred awards that a new employer may need to buy out.
• Step-up candidates from larger firms. Strong deputies or divisional heads at larger institutions ready for the top seat at a smaller firm. They bring process and control experience, and the assessment should test whether they can operate with a leaner team.
• Cross-sub-sector moves. Banking to lending, insurance to asset management, or payments to banking. These can work well, but the regulatory knowledge does not transfer automatically and should be tested rather than assumed.
• Advisory and consulting backgrounds. Partners and directors from regulatory, risk and audit practices moving in-house, most often into risk, compliance, internal audit and operations roles.
• Former regulators. Valuable for risk and compliance leadership, provided they have also shown they can work inside a commercial business and make decisions, not only review them.

Because the best candidates are usually employed, well paid and not looking, most senior financial services hires come from direct approach rather than advertising. A structured financial services executive search maps the relevant peer group, approaches candidates confidentially and tests motivation early, before anyone has invested in a long interview process.

Assessing candidates for a regulated role

Assessment for a regulated senior role has two strands that should run together rather than one after the other.

Capability and fit. The usual executive assessment: track record against the specific challenges the firm faces, leadership style, how the candidate has handled failure, and how they will work with the existing board and executive team. Use case-based interviews built on real issues in the business rather than generic competency questions.

Fitness and propriety. The regulator assesses honesty, integrity and reputation; competence and capability; and financial soundness. The firm must satisfy itself on the same points before it applies. In practice that means checking regulatory references from previous employers early, running criminal record and credit checks, understanding any past regulatory or disciplinary issues openly, and confirming the candidate can describe their prospective responsibilities in their own words. If the regulator interviews the candidate, which is common for CEO, Chair and other significant roles, preparation matters: they will expect a clear understanding of the firm’s business model, risks and the candidate’s specific accountabilities.

Draft the Statement of Responsibilities alongside the job description, not after the offer. If the board cannot agree what the person will be accountable for, that is a sign the role is not ready to recruit.

Packages, deferral and malus

Pay in regulated firms is constrained by remuneration rules that differ by firm type. Banks, building societies and PRA-designated investment firms follow the PRA and FCA remuneration codes. FCA investment firms, including most asset and wealth managers, fall under the MIFIDPRU Remuneration Code. Insurers have their own requirements. Smaller and less complex firms are subject to lighter versions of these rules, so the first question is always which code applies and at what level.

For banks and building societies, the rules have changed materially. The cap on the ratio of variable to fixed pay was removed in 2023. In October 2025 the PRA and FCA announced further reforms, effective from 16 October 2025: the longest deferral period for senior staff was cut from eight years to four, the separate retention period was removed, payment of deferred awards can start from year one, and the FCA’s own remuneration rules for these firms were heavily simplified. Malus and clawback remain, so variable pay can still be reduced or recovered where misconduct or risk failures come to light.

For hiring, three points matter:

• Buy-outs. Senior candidates often forfeit unvested deferred awards when they move. Any buy-out has to sit within the new firm’s remuneration rules, generally on no more favourable terms than the awards being replaced, and should be costed before an offer is made.
• Control functions. Pay for risk, compliance and audit leaders should be set so that it does not depend on the performance of the business areas they oversee.
• Equity in growth firms. Founder-led and investor-backed fintechs and lenders often use equity to close a gap in cash pay. That works, but check how the applicable remuneration code treats it before promising terms.

Take remuneration advice early if the firm is in scope of the banking codes. An offer that has to be restructured after acceptance damages trust with the candidate at the worst possible moment.

Interim and fractional options

Not every senior need in financial services is a permanent hire. Three situations call for something different:

• An unexpected gap. When an SMF holder leaves or is absent at short notice, the 12-week rule allows temporary cover without pre-approval in defined circumstances. If the gap will last longer, the firm needs an approved replacement, which may be an interim executive applied for in the normal way.
• A specific project. Remediation after a regulatory review, a skilled person’s report, an authorisation application or a systems change often needs an experienced interim leader for six to twelve months.
• A smaller firm that needs senior judgement but not a full-time seat. Many small authorised firms, brokers and start-ups use a part-time Head of Compliance, MLRO or finance leader. See our fractional C-suite service.

Two cautions apply. A fractional SMF holder is as accountable as a full-time one, so the regulator will want to see that they have enough time, access and authority to do the job; a part-time arrangement that looks nominal will attract questions. And an interim who will hold an SMF still needs approval, so start that process as soon as the person is identified. Our team arranges permanent, interim and fractional appointments across the sector and can advise which model suits the situation.

Common mistakes

• Setting a start date before allowing for approval. Notice periods of three to six months and the regulator’s decision time together set the real timetable.
• A vague brief. “Financial services experience” is not specific enough. Name the sub-sector, the permissions, the size of firm and the stage it is at.
• Leaving references and checks to the end. A problem found after an offer is accepted is far harder to handle than one found at shortlist.
• Designing pay that does not fit the rules. Particularly buy-outs and control-function bonuses.
• Assuming regulatory knowledge transfers. Test it, especially for cross-sub-sector and first-time SMF candidates.
• Planning around proposals. The Phase 2 SMCR changes may reduce pre-approval for some roles, but they are not yet law. Plan on current rules.

Frequently asked questions

How long does a senior financial services hire take?

Allow for the search itself, the candidate’s notice period and, for SMF roles, regulatory approval. The FCA aims to decide at least half of senior manager applications in 35 days or fewer, but complex and dual-regulated applications can take considerably longer.

Has the Certification Regime been abolished?

Not yet. The Financial Services and Markets Bill proposes removing it from legislation, and the FCA and PRA consulted in October 2026 on what would replace it. Until the Bill passes and new rules are made, the current regime applies.

Can someone start in an SMF role before approval?

Generally no. A person cannot perform an SMF until approved. The 12-week rule allows temporary cover for an unforeseen absence, but it is not a route to start a planned permanent appointee early.

Is the banker bonus cap still in place?

No. It was removed in 2023, and deferral periods for senior bankers were shortened from October 2025. Deferral, malus and clawback rules still apply to in-scope staff.

Can a fractional executive hold a Senior Manager Function?

Yes, if the regulator is satisfied they have the time, competence and authority to discharge the role. This is common for Head of Compliance and MLRO roles at smaller firms.