Why Checks Should Come Before the Offer

Firms are required to assess a candidate’s fitness and propriety before applying for approval, and the regulator will make its own assessment against the fit and proper test. The practical problem is timing. Many firms leave checks until after an offer is accepted, treating them as part of onboarding. For most roles that’s fine. For a Senior Manager, it’s too late, because the checks determine whether the application is likely to succeed.

Running the main checks at shortlist stage, with the candidate’s knowledge and consent, lets the firm address any issues early, often by simply asking the candidate about them. It also protects the candidate, who shouldn’t resign from a secure role on the strength of an offer that may not survive the application.

Check One: The FCA Register

The FCA Financial Services Register is the starting point. For individuals, it shows the Senior Manager Functions and controlled functions they hold or have held, the firms they held them at and the dates. It also records prohibition orders and some enforcement outcomes.

When reviewing a candidate’s record, look for:

• Consistency with the CV. Do the functions and dates match what the candidate has told you? Discrepancies are often innocent, but they should be explained.
• Short tenures. A Senior Manager Function held for a few months may reflect a restructuring, an interim assignment or a difficult departure. Ask about it.
• Gaps. A period with no functions may simply mean a non-regulated role, but it’s worth understanding.
• Current roles. A candidate who still holds functions elsewhere, particularly as a fractional holder, will need to explain how the new role fits alongside them.

The FCA also publishes the Directory, which covers certified staff and directors at firms under the Senior Managers regime. For candidates coming from certified roles rather than Senior Manager Functions, it can confirm their recent regulated roles.

Check Two: Regulatory References

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

Two practical points make a big difference. First, request references as early as the candidate is comfortable with, ideally before or immediately after the offer. Slow references are one of the most common causes of delay. Second, ask the candidate directly whether they expect anything to be disclosed. Most candidates will be open about a past issue if asked, and an issue explained in context is judged far more fairly than one that arrives unexpectedly in a reference.

Check Three: Criminal Records

Firms applying for a Senior Manager’s approval must carry out a criminal records check. It’s sensible to do this with the candidate’s consent at the point of conditional offer, so that the result is available before the application is submitted. As with every check, the key question isn’t only what the record shows but whether the candidate disclosed it. Non-disclosure is usually a more serious concern than the underlying matter.

Check Four: Financial Soundness

The fit and proper test includes financial soundness. Quick public checks include the Individual Insolvency Register for bankruptcies and individual voluntary arrangements, and a credit check covering county court judgments. These rarely reveal anything, but when they do, the regulator will want to see that the firm knew and considered it.

Check Five: Directorships and Business Interests

Companies House shows a candidate’s current and past directorships, including companies that have been dissolved or entered insolvency. It’s also where disqualified directors are recorded. Look for:

• directorships the candidate hasn’t mentioned, which may indicate conflicts of interest or time commitments
• companies that failed while the candidate was a director, which aren’t disqualifying in themselves but should be discussed
• any disqualification, which is highly relevant to fitness and propriety.

Business interests matter for Senior Managers because conflicts of interest must be identified and managed, and because the regulator considers whether the individual will have enough time for the role.

Check Six: Competence for This Role

Most checks look backwards. The competence assessment looks forwards: can this individual do this job, at this firm? That means testing the candidate’s experience against the specific Statement of Responsibilities they’ll sign. A candidate with an impressive record at a large bank may still need to show they can work at the scale and pace of a smaller firm. A first-time candidate needs to show evidence of the work they’ve already done in the function. Our article on Senior Manager Functions and the individual designation guides set out what the regulator expects for each role.

Structured interviews, case discussions based on the firm’s real risks and conversations with the board chair or an independent non-executive all help. So does asking the candidate how they’d approach their first 90 days.

Handling What You Find

Ask the Candidate First

If a check reveals something unexpected, discuss it with the candidate before drawing conclusions. Many issues have straightforward explanations: a company dissolved after a planned closure, a short tenure due to restructuring, a dispute that was resolved in the individual’s favour.

Consider Relevance and Seriousness

The regulator considers how relevant and serious a matter is, how long ago it happened and what the individual has done since. Firms should take the same approach, and record their reasoning.

Disclose in the Application

Anything relevant should be disclosed in the application, with an explanation of how the firm has considered it. Applications that address issues openly are more likely to succeed than those that leave the regulator to find them.

A Pre-Offer Checklist

• FCA Register and Directory reviewed and consistent with the CV.
• Candidate asked directly about anything that may appear in references or checks.
• Regulatory reference requests prepared and consent obtained.
• Criminal records check arranged at conditional offer.
• Insolvency and credit checks completed.
• Companies House directorships reviewed and discussed.
• Competence assessed against the Statement of Responsibilities.
• Current roles and time commitments confirmed.

How SMF Capital Approaches This

Every SMF Capital search builds these checks into the process before a shortlist is presented, so that firms meet candidates who have already been tested for regulatory readiness as well as fit. It’s one of the main reasons we specialise in Senior Manager appointments rather than treating them as ordinary senior hires. Our SMF recruitment services page explains the full process, and our guide to how long an SMF appointment actually takes shows where each check fits in the timeline.

For C-suite and board appointments at larger regulated firms, our sister practice Exec Capital runs FCA-regulated executive search with the same approach to regulatory checks.

The Bottom Line

Checking a Senior Manager candidate properly takes a few days and costs very little. Not doing it can cost months, and occasionally the appointment itself. Run the checks before the offer, talk to the candidate about anything you find, and disclose it properly in the application.