Why the First Approval Is Different

Most senior professionals have been assessed many times: by employers, by boards, by auditors. The first Senior Manager application is different for three reasons.

First, the regulator makes the decision, not just the firm. The firm must be satisfied you’re fit and proper, but the FCA, and for dual-regulated firms the PRA, must also approve you before you can start. Second, the assessment looks backwards as well as forwards. Your regulatory history, your previous employers’ references and your personal financial position are all part of it. Third, once approved, you’re personally accountable. Under the Duty of Responsibility, the regulator can take action against you if a breach occurs in your area and you didn’t take reasonable steps to prevent it.

Understanding these differences, and preparing for them, is what separates first-time candidates who sail through approval from those who stall.

What the Regulator Is Actually Assessing

Every application is assessed against the fit and proper test, which has three parts.

Honesty, Integrity and Reputation

The regulator looks at anything that might call your honesty into question, including past regulatory findings, disciplinary action, disputes with employers and professional bodies, and criminal records. Firms must obtain a criminal records check through the Disclosure and Barring Service or its equivalents as part of an application. The principle is simple: disclose everything relevant, even where you think it’s minor. Non-disclosure is treated far more seriously than most of the matters people are tempted to leave out.

Competence and Capability

This is where first-time candidates need to work hardest. The regulator wants evidence that you have the knowledge, experience and judgement for the specific function, at the specific firm. For someone who has never held the function, that evidence comes from what you’ve already done: the scope you’ve covered as a deputy or head of function, the decisions you’ve taken, the frameworks you’ve built, and the board or committee reporting you’ve been responsible for.

Financial Soundness

The regulator checks for matters such as county court judgments, bankruptcy or insolvency arrangements. For most candidates this is straightforward, but anything relevant should be disclosed and explained in the application.

Building Your Case Before You Apply

Map Your Experience to the Function

Start with the Statement of Responsibilities you’ll be asked to sign. For each responsibility, identify where you’ve already done the work, even if someone else held the formal accountability. A deputy MLRO who has run the suspicious activity reporting process, written the annual MLRO report and presented it to the board has strong evidence for an SMF17 application. A head of operations who has led operational resilience testing and outsourcing oversight has the core of an SMF24 case.

Close the Gaps You Can

If there are parts of the role you haven’t covered, address them before you apply where you can. That might mean taking on a specific responsibility in your current role, completing a relevant qualification, or arranging to attend board or committee meetings. Where a gap can’t be closed in advance, the firm can address it in the application, for example with a structured induction, a mentor or additional non-executive oversight in the first year.

Know the Rules You’ll Be Held To

Every Senior Manager is subject to the Conduct Rules, including the Senior Manager Conduct Rules on taking reasonable steps to ensure the business is controlled effectively and complies with regulatory requirements. Regulators and firms alike expect first-time candidates to understand these rules, and to be able to explain how they’d meet them.

Prepare for an Interview

The regulator may interview candidates for Senior Manager roles, particularly at larger or higher-risk firms and for first-time applicants. Interviews focus on your understanding of the role, the firm’s risks and your own responsibilities. Candidates who have read the firm’s business plan, risk appetite and recent board papers, and who can talk about specific risks rather than general principles, perform best.

Regulatory References

Every Senior Manager application requires regulatory references covering the previous six years from each relevant employer. The references follow a mandatory template and must disclose certain matters, including breaches of the Conduct Rules and disciplinary action connected with them.

For first-time candidates, two points matter. First, request references early, because a slow response from a former employer is one of the most common causes of delay. Second, make sure you know what your references will say. If there’s anything that could be disclosed, raise it with the hiring firm yourself before the reference arrives. It will be judged far more fairly in context than as a surprise.

What to Ask Before Accepting

Taking on a Senior Manager Function means accepting personal accountability for how part of the firm operates. Before you accept, it’s reasonable, and sensible, to ask:

• Why is the role vacant, and what did your predecessor hand over?
• What’s the firm’s recent regulatory history, including any supervisory concerns, skilled person reviews or remediation programmes?
• How is your function resourced, and will you have the budget and people to meet your responsibilities?
• To whom will you report, and will you have direct access to the board and any independent non-executives?
• What’s in your Statement of Responsibilities, and does it overlap with or leave gaps alongside other Senior Managers?
• What directors’ and officers’ insurance and indemnity cover will you have?

Firms that answer openly are usually firms you’ll be able to work with. If a firm is reluctant to answer, treat that as information too. Our analysis of FCA enforcement trends shows how often problems trace back to issues a Senior Manager inherited rather than created.

Pay and Negotiation

A first Senior Manager role usually brings a significant step up in pay, reflecting the personal accountability involved. Ranges vary widely by designation, firm size and sector. For current benchmarks across the main Senior Manager Functions, our sister practice Exec Capital publishes an SMF salary guide, and its FCA-regulated executive search pages cover board and executive appointments at larger firms.

When negotiating, remember that the approval timetable affects your start date. The regulator can take up to three months to decide a complete application, and notice periods for senior roles are often three to six months. Agree with the firm how these will run in parallel, and what happens if approval takes longer than expected. Our guide to SMF appointment timelines explains how the stages fit together.

For Firms: Backing a First-Time Senior Manager

Appointing a first-time Senior Manager can be an excellent decision. They’re often closer to the detail of the function, more motivated and easier to secure than an experienced holder being courted by several firms. The key is making the case to the regulator clearly: explaining why the individual is ready, what support they’ll have, and how any gaps will be addressed. Firms that plan this from the start of the search, rather than after an offer is accepted, have far fewer difficulties at approval. Our SMF recruitment service builds this assessment into every search.

Find Out More

We run regular online candidate clinics for people preparing for their first Senior Manager role, covering the fit and proper test, references and what to ask before accepting. See our events page for upcoming dates. If you’d like a confidential conversation about your own situation, you can register with SMF Capital.