The Senior Manager Roles

At a typical Core wealth manager or advice firm, the Senior Manager Functions include the Chief Executive, executive directors holding SMF3, the Chair where the firm has one, SMF16 Compliance Oversight and SMF17 Money Laundering Reporting, and, for limited liability partnerships, SMF27 Partner. Larger firms may meet the Enhanced thresholds, which brings additional functions and a Responsibilities Map. Our guide to which SMFs apply at each firm tier covers the mapping.

Firms that hold client money or custody assets must also allocate responsibility for compliance with the client assets rules in CASS to a Senior Manager. In smaller firms, this often sits with the chief executive or the finance director, and it’s a responsibility the FCA takes very seriously.

Where the FCA Focuses

Ongoing Advice and Ongoing Charges

The FCA has looked closely at whether clients paying for ongoing advice actually receive the service they pay for, and whether the charges represent fair value. For Senior Managers, this means having management information that shows whether reviews are happening, what clients receive and whether the firm can evidence it. Firms that can’t answer these questions quickly are exposed.

Suitability and Investment Outcomes

Suitability of advice and discretionary management decisions remains a core supervisory focus. The senior team needs to oversee how advice is given and checked, how investment propositions are designed and monitored, and whether clients’ portfolios remain suitable over time.

The Consumer Duty

The Consumer Duty requires firms to deliver good outcomes for retail clients. For wealth and advice firms, this covers product and service value, communications, support for vulnerable clients and whether clients understand what they’re paying for. The board must review an annual assessment of whether the firm is delivering good outcomes, and Senior Managers must be able to evidence the conclusions.

Client Assets

Firms that hold client money or assets face detailed CASS requirements, including reconciliations, records and, for many firms, annual audits. CASS failures have led to significant enforcement action across the sector. The Senior Manager responsible for CASS needs genuine oversight of how it works, not just a signature on the audit.

Competence Beyond the Qualifications

Advice firms are familiar with competence requirements for advisers. Retail investment advisers must meet qualification standards and hold a Statement of Professional Standing, under the rules in the Training and Competence sourcebook. Senior Managers are assessed differently. The regulator’s fit and proper test looks at whether the individual has the knowledge, experience and judgement for their specific function.

That creates a common gap. An excellent adviser who founded a firm may be highly qualified in advice but less experienced in running a regulated business: governance, risk management, financial control, CASS oversight and regulatory engagement. As firms grow, the senior team needs people who bring those skills, whether as full-time executives, fractional specialists or independent non-executives.

The Senior Roles That Matter Most

A Chief Executive Who Runs the Business, Not Just the Advice

As advice firms grow, the chief executive’s role shifts from leading advisers to running a regulated business. Some founders make that transition well. Others do better handing the chief executive role to someone with broader management experience and staying close to clients. Neither is wrong, but the choice should be deliberate.

A Compliance Officer With Wealth Experience

Compliance at a wealth or advice firm needs specific knowledge of suitability, ongoing advice, investment propositions and financial promotions. Many smaller firms use a fractional compliance officer with deep sector experience, often combined with outsourced file checking. Our article on outsourced compliance versus a fractional Senior Manager explains the difference.

Finance and CASS Oversight

Firms holding client money or assets need finance leadership that understands CASS, capital requirements for investment firms and, for MIFIDPRU firms, the ICARA process. This is often the least developed part of the senior team at founder-led firms.

Independent Challenge

An independent non-executive or chair with wealth sector experience can transform the board’s scrutiny of client outcomes, fair value and CASS. This is increasingly common at firms backed by private equity and at those preparing for sale.

Discretionary Managers Versus Advice Firms

Although they’re often grouped together, discretionary investment managers and financial advice firms face different emphases. Discretionary managers make investment decisions on clients’ behalf, so the senior team must oversee investment governance: how models and portfolios are designed, how risk is monitored, how performance is reviewed and how best execution is achieved. Many are MIFIDPRU investment firms with the prudential requirements that brings.

Advice firms, by contrast, are judged mainly on the suitability of the advice given and the service delivered afterwards. Their senior teams need strong oversight of advice processes, file checking and client servicing. Firms that do both, or that run a centralised investment proposition alongside advice, need Senior Managers who understand both sets of risks and how they interact.

Consolidation and the Senior Team

The wealth and advice sector has seen sustained consolidation, with private equity-backed groups acquiring many smaller firms. Each acquisition raises questions about who holds which Senior Manager Functions, how group-level oversight works and whether the acquired firm keeps enough local governance. The regulator has shown particular interest in how consolidators oversee client outcomes across many acquired businesses. Our article on change in control and the Senior Manager team covers the issues for buyers.

For sellers, the senior team matters too. A firm with a clear Senior Manager structure, strong compliance and CASS oversight and good management information is more attractive to buyers and moves through due diligence more smoothly.

Hiring Challenges

• A tight pool of experienced Senior Managers. Compliance officers and finance leaders with wealth experience are in demand, particularly from consolidators.
• Succession in founder-led firms. Many firms depend on one or two founders who hold several functions. Planning their succession, whether through sale or internal appointment, is one of the biggest governance challenges in the sector.
• First-time Senior Managers. Senior advisers and paraplanners stepping into management roles may need support to make a strong approval case. Our article on first-time Senior Manager roles explains how.

For chief executive and board appointments at larger wealth managers, our sister practice Exec Capital runs FCA-regulated executive search at C-suite level.

Questions Boards Should Ask

• Can the firm show that every client paying for ongoing advice receives it?
• Who is responsible for CASS, and do they have genuine oversight?
• Does the senior team include people with experience of running a regulated business, not just advising clients?
• Is there independent challenge at board level?
• What’s the succession plan for the founders and key Senior Managers?

The Bottom Line

Wealth and advice firms are built on trusted client relationships, and the Senior Managers regime asks the senior team to show that trust is well placed. Firms that combine advice expertise with strong compliance, finance and CASS oversight, and plan succession well ahead, are best placed both to meet the FCA’s expectations and to realise the value they’ve built.