Five Questions Every New Senior Manager Asks, and Where to Hear the Answers
Taking on a Senior Manager role in a regulated firm for the first time is a step change. One day you’re a senior compliance professional, finance director or business head; the next, you’re approved by the FCA or PRA and personally accountable for an area of the business. It’s no surprise that the same questions come up again and again.
We hear them every week at SMF Capital, where we recruit Senior Managers for regulated firms. They’re also the questions behind SMF Unlocked, our podcast about the Senior Managers regime, which you can find on Audioboom. Here are five of the most common, with short answers and a pointer to where we go into more depth.
1. “Am I personally liable if something goes wrong?”
This is usually the first question, and the honest answer is: potentially, yes. Under the Senior Managers and Certification Regime, every Senior Manager holds a Statement of Responsibilities, and the Duty of Responsibility means the regulator can take action against an individual if a breach happens in their area and they didn’t take reasonable steps to prevent it.
The key words are “reasonable steps”. The regime doesn’t expect Senior Managers to prevent every problem. It expects them to understand their area, get proper information, act on warning signs and keep a record of what they did. Senior Managers who do that well are in a strong position even when things go wrong.
2. “What will the regulator ask me?”
Before approving a Senior Manager, the regulator assesses whether the candidate is fit and proper: honest, competent and financially sound. For significant roles, it may also interview the candidate. The questions usually focus on the firm’s business and risks, the candidate’s responsibilities, how they’ll oversee their area and how they’d handle realistic scenarios.
The best preparation is knowing the firm and your Statement of Responsibilities thoroughly, and being honest about anything you still need to learn. Our written guide to the fit and proper test sets out what the regulator assesses.
3. “How long before I can actually start?”
Longer than most people expect. A Senior Manager can’t perform the function until they’re approved, and the regulator has a statutory period to decide. Add a three to six month notice period and the time from offer to first day in the role can easily run to several months.
Many firms bring new Senior Managers in early in a non-SMF role, so they can learn the business while the application is considered. Others use temporary cover. The 12-week rule allows limited temporary cover in some circumstances, which we explain in our guide to the 12-week rule.
4. “Can I do this part-time?”
Increasingly, yes. Fractional Senior Managers, who work for a firm for one, two or three days a week, are now common at smaller firms, particularly as compliance officers and MLROs. The accountability is exactly the same as for a full-time role. What matters is whether the time commitment is realistic for the firm’s size and risks, and whether the arrangement covers urgent matters and absences properly.
For firms, a fractional arrangement can provide senior, approved leadership at a proportionate cost. Our page on fractional and interim SMF cover explains how these arrangements typically work.
5. “What should I do in my first 90 days?”
Understand what you’ve inherited, before anything else. Read the handover, the risk register, recent audit reports and any regulatory correspondence. Meet the team and the people your area depends on. Look hard at the management information you receive and whether it tells you what you need to know. And write down what you found and what you plan to do about it.
That record matters. If a problem that existed before you arrived comes to light later, a dated note of what you found and how you responded is strong evidence of reasonable steps.
Hear More on SMF Unlocked
| If you want to know about… | Listen for episodes on… |
|---|---|
| Personal accountability | The Conduct Rules and what enforcement tells us about reasonable steps |
| Getting approved | The fit and proper test and regulatory references |
| Timing | How long Senior Manager appointments really take |
| Part-time roles | Fractional Senior Managers and interim cover |
| Specific roles | Individual Senior Manager Functions, from chief executive to MLRO |
SMF Unlocked is designed to be practical: each episode takes one part of the regime and explains what it means for the people who have to apply it. It’s hosted on Audioboom and available on Apple Podcasts and other podcast apps.
Whether you’re preparing for your first Senior Manager role, already hold one, or appoint the people who do, follow the SMF Capital channel on Audioboom for new episodes, and explore the written guides on the SMF Capital website.
About the author: Adrian Lawrence FCA is the founder of SMF Capital, which recruits Senior Managers for FCA and PRA-regulated firms, and host of the SMF Unlocked podcast. He is a Chartered Accountant and Fellow of the ICAEW, a former listed-company Finance Director, and founder of FD Capital and The Capital Recruitment Group.
