One of the quieter changes in UK financial services is that a growing number of small regulated firms no longer employ their compliance leadership. They share it.
The same individual holds a senior compliance role at several businesses, working a few days a month at each. It is entirely permitted, it is increasingly common, and it solves a problem that smaller firms have struggled with for years.
The Problem It Solves
Regulated firms must have certain roles covered regardless of their size. A three-person brokerage needs someone responsible for compliance oversight just as a 300-person payments business does. The obligations do not scale down.
For a small firm that creates an awkward arithmetic. The work is real but it does not fill a full-time job. Hire full-time anyway and you are paying for capacity you do not need — and, because budgets are finite, you are usually paying for it at a level of seniority below what the role actually warrants.
The alternative most firms used to take was to give the responsibility to whoever had room for it: the finance director, an operations manager, sometimes the founder. That worked when the requirements were lighter. It works considerably less well now.
Why Sharing Is Allowed
The relevant regime does not require these roles to be filled by employees. The individual holding a designated function can be engaged on a consultancy basis, and can hold roles at more than one firm.
What does not change is accountability. The firm keeps its obligations and the individual carries personal responsibility for the function, whatever the contract says. Engaging someone externally is not a way of transferring risk to a supplier — a point worth being clear about, because it is occasionally sold that way.
Regulators do take an interest in capacity. Someone holding senior roles at a long list of firms will reasonably be asked whether they can discharge them all, and firms hiring on this basis should ask the same question before the regulator does.
The Seniority Trade
The real appeal is not cost saving, though firms often describe it that way at first. It is the seniority the same money buys.
A constrained budget spent on a full-time appointment buys someone relatively early in their career. Spread across two or three days a month, it buys someone who has done the job for twenty years, been through regulatory interactions, and knows what matters and what does not.
For a function whose value concentrates in a small number of difficult judgements each year, that trade usually favours experience over availability. The caveat is real though: a senior part-time holder will not answer every routine question the same afternoon. Firms that genuinely need constant hand-holding may be better served by junior capacity with senior oversight above it — but that is a two-part structure and should be designed deliberately rather than arrived at by accident.
The Independence Advantage Nobody Mentions
There is a second benefit that rarely features in the pitch, and it may matter more than the first.
A compliance officer’s job occasionally requires telling the business something it does not want to hear: that a client cannot be taken on, that a product needs changing, that something must be reported. The value of the role is concentrated almost entirely in those moments.
Someone whose entire income depends on one employer, reporting to the person whose commercial decisions they are meant to challenge, is in a structurally difficult position however principled they are. Someone with several clients can afford to give the unwelcome answer.
That is a feature of the arrangement rather than of the person, and it is one of the better arguments for the model.
What It Looks Like From the Other Side
The people doing these roles are mostly not early-career consultants looking for flexible work. They are experienced practitioners who have chosen a portfolio over a single employer, and understanding why helps firms hire them.
Part of the appeal is variety: several businesses, different models, problems that do not repeat. Part of it is independence, in the plain sense of not being dependent on one firm’s goodwill. And part of it is that a portfolio holder sees far more situations in a year than someone embedded in one business, which compounds into judgement that a single-employer career does not produce as quickly.
What they are assessing when a firm approaches them is reasonably consistent. Is the resourcing realistic for the work described. Who will they report to, and can they reach the board without going through the person they may need to challenge. What is the firm’s current standing with its regulator. And what happens, in practice, when they raise something nobody wants to hear.
Firms sometimes read these questions as a lack of enthusiasm. They are the opposite — they are what someone who understands the personal accountability attached to the role asks before accepting it. A candidate who asks none of them is the one to worry about.
What It Costs
Engagements are normally priced on a day rate against an agreed minimum, rather than as a salary equivalent. For a small firm with a straightforward product, two to three days a month is a realistic starting point for compliance oversight; businesses going through authorisation, or growing quickly, should expect more and should expect it front-loaded.
The figure that causes trouble is one day a month, which is quoted more often than any other and is almost always the budget talking rather than an assessment of the work. It is enough for someone to attend and answer questions. It is not enough to run a programme of checks that would survive scrutiny, and the gap between those two things takes months to become visible.
Where It Stops Working
Shared arrangements are not a permanent answer for every firm, and the point at which they stop fitting is reasonably predictable.
Transaction volume is the clearest signal, particularly on the financial crime side. That workload scales with how many transactions a business processes rather than how complicated it is, so a firm can outgrow a part-time arrangement without changing its product at all.
Regulatory attention is the second. A firm working through a remediation plan, or one that has attracted supervisory interest, generally needs dedicated capacity rather than scheduled days.
Growth is the quiet one. An arrangement that was proportionate when it was agreed stops being proportionate gradually, and almost nobody notices the moment it happens. The firms that handle this well build in a review — annually, or triggered by something concrete like volume crossing a threshold or a new product launching.
The Risk to Plan For
Concentrating a function in one part-time individual creates a dependency that firms rarely price.
If that person resigns, the firm has lost a regulated function, and replacing them requires regulatory approval of a successor — which takes as long as it takes, and is not within the firm’s control. Where one person covers both compliance and financial crime, which is common at this size, the firm loses two functions on the same day.
There is a limited allowance for temporary cover in defined circumstances, which helps. It is narrower than most firms assume. The businesses that come through this in weeks rather than months are the ones that thought about it beforehand: a briefed deputy, or an established relationship with a specialist recruiter who can move quickly.
Getting the Arrangement Right
Three things distinguish the arrangements that last from the ones that generate friction.
An agreed minimum, not an assumption. The engagements that work specify a minimum number of days a month with a mechanism for more when something unusual happens. The ones that fail are informal retainers where the firm assumes continuous availability and the holder absorbs whatever arrives, until they resign.
An honest size. Ask any experienced candidate to size the role themselves before mentioning your number. Someone who has done the job will map the year’s work and arrive at a figure. Someone who simply agrees with whatever you propose has not thought about it.
A question about capacity. How many other regulated roles does this person hold, and how do they accommodate them? It is a reasonable question, strong candidates expect it, and it is far better asked now than discovered later.
A Structural Shift, Not a Trend
The growth of shared compliance leadership is a response to a genuine mismatch: obligations that do not scale down, applied to firms that are small. Nothing in the current direction of regulation suggests that mismatch is about to ease.
For a lot of small financial businesses, buying a few days a month of real experience is simply a better answer than a full-time hire the budget had to compromise on. The firms doing it well treat it as a deliberate structure with a review date, rather than a cost-saving measure they hope nobody examines too closely.
FD Capital places fractional and interim compliance leadership at regulated firms, including combined appointments where one person covers both compliance oversight and financial crime — see fractional dual SMF16 and SMF17 recruitment.
