Senior Managers Regime – doing the right thing and maybe being seen doing the right thing?

Financial Advisory

James Goad

Corporate GovernanceCultureFinancial AdvisoryManagement InformationSecuritySMCRUKWinning Advisers

With the FCA ‘Senior Managers Regime’ imminent, it business critical that Advisers fully understand the implications on governance and responsibility and are actively reviewing business processes, structures and accountability.


  • Advisory firms must ensure they fully understand the implications of SMR and Certification regime and Conduct Rules.
  • FCA are trying to raise standards in the industry on conduct risk and corporate governance.
  • We could see a major impact on business models as firms de-risk investment solutions.
  • Review existing processes and accountability in the business and possibility of these regimes to substantially impact on business models.
  • Firms must document their governance structure, appoint SM’s and train staff appropriately.
  • Regimes will result in increased documentation of areas of responsibility.

Key issues and challenges:

  • Allocation, appointment and training of senior managers.
  • Understanding the new certification requirements for below senior manager roles, including advisers.
  • Documentation of senior manager roles and responsibilities, governance and conduct risk processes.
  • Creating process development for managing “fit and proper” processes for advisers and other staff.
  • Develop M.I. (Management Information) to assist senior managers in managing their responsibilities.
  • Could we see a move towards the Network Model?
  • Understanding the revised certification process of advisers with onus on firms to approve new advisers and review annually.
  • Consider the role of TC (Training and Confidence) in the future.

Conclusions and solutions:

  • Map existing business and areas of responsibility into the SM & CR regime.
  • Consider carefully who are the most appropriate people to assume responsibility in each area?
  • Ensure each senior manager has sufficient visibility, MI and authority to discharge their duty in that area.
  • Develop training plans for all staff to understand their conduct responsibilities.
  • Start with a detailed organisation chart and a “root & branch” analysis of the current business structure and what is required in the future.
  • Review business model – is it appropriate and aligned with governance structures.
  • If running an Investment Committee defines terms of reference, roles and selection processes.
  • Consider if running your own Central Investment Proposition is appropriate?
  • Review adviser and non SM role certification processes.
  • Relook at the role of internal committees e.g. investment committees.
  • Map existing business and areas of activity into the SM & CR regimes.
  • Consider carefully the most appropriate people to assume responsibility in each area.
  • Ensure the SM has sufficient visibility, M.I. and authority to discharge their duty in the area.
  • Ensure certification processes are in place for annual processes and new starters.

Experts: Alan Hughes - Foot Anstey, Tony Bray- threesixty
Facilitators: John Chapman and Neil Baines-Thomas - Owen James Group