Firms plan senior manager appointments as though approval is a formality with a waiting time attached. Usually it is. But the FCA does refuse applications, and more often it does something firms plan for even less: it asks questions that stretch the timetable, or makes clear enough reservations that the candidate withdraws.
Almost nobody has a plan for that. This is what actually happens, and what a firm can do about it before and after.
Refusal Is Rare. Withdrawal Is Not.
Outright refusals are uncommon, and the reason is partly structural: by the time an application would be refused, most candidates have already withdrawn.
The pattern is familiar. The application goes in, the regulator comes back with questions, the questions are specific enough to signal where the concern lies, and the candidate — who is usually employed elsewhere, or holds functions at other firms — decides the process is not worth continuing. The application is withdrawn rather than determined, which is better for everyone’s record and leaves the firm in exactly the same position as a refusal.
Firms that only plan for a binary approve-or-refuse outcome are planning for the least likely version of the problem.
What Actually Causes Problems
The issues that derail applications cluster in a few areas, and most are knowable in advance.
History the firm did not ask about. Regulatory references, past disciplinary matters, previous roles at firms that were themselves subject to action. None of these are automatically disqualifying, and candidates are frequently approved with history behind them. What causes difficulty is the firm discovering it at the same time as the regulator.
Capacity. An individual holding senior management functions at several firms will attract questions about whether they can discharge another. This is increasingly common with fractional candidates and it is a legitimate question rather than an obstacle — but it needs a credible answer prepared, not improvised.
Fit between the person and the role as described. A candidate whose experience sits at a very different firm profile, or whose Statement of Responsibilities covers ground they have not covered before, invites scrutiny. This is particularly common where a firm has written an ambitious Statement of Responsibilities and matched it with a candidate who is a stretch against it.
The firm itself. Where the regulator already has concerns about the business, applications attached to it receive more attention. That is not the candidate’s problem but it becomes their experience.
Before You Apply: Do the Diligence the Regulator Will Do
Most of the above is discoverable. The firms that have problems are generally the ones that treated fit and proper as a form to complete rather than an assessment to carry out.
Check the public record. SMF Capital’s guide on checking an SMF holder on the FCA register covers what is visible and what it tells you. Take regulatory references seriously and early, and read them rather than filing them. Ask the candidate directly about anything in their history that will come up — a candidate who discloses something awkward at interview is giving you the chance to prepare a position, and one who does not is creating a problem for both of you.
Ask about capacity in writing. How many functions, at how many firms, with what time commitment, and how would they accommodate this one. That answer belongs in the application rather than in a later response to questions.
SMF Capital’s note on due diligence before accepting an SMF role covers the same ground from the candidate’s side, and it is worth reading because a candidate doing their own diligence properly is a good sign rather than an awkward one.
Write a Statement of Responsibilities You Can Defend
A surprising proportion of difficulty originates in the Statement of Responsibilities rather than the candidate.
Firms write them aspirationally — listing everything the function might conceivably cover — and then present a candidate who is credible for the role as it actually exists. The mismatch is visible, and it prompts questions the firm then has to answer by explaining that the document overstates the position, which is not a comfortable conversation to have with a regulator.
Write it to describe the job. Where responsibilities are shared, say how. Where the holder is part-time, be explicit about the arrangement rather than hoping it will not be noticed — fractional and outsourced arrangements are accepted routinely, and concealment is far more damaging than the arrangement itself.
While the Application Is Live
Two things matter during the wait.
The first is keeping the candidate engaged. A good candidate with other options will not sit indefinitely through a silent process, and the firm that stays in contact — with honest updates rather than reassurance — holds onto people that a firm going quiet does not.
The second is answering questions properly. When the regulator comes back, the temptation is to respond quickly and minimally. A considered response that addresses the underlying concern, rather than the literal question, is usually what shortens the process. If the question relates to the candidate’s history or capacity, involve them in the answer rather than drafting around them.
Candidates increasingly face an interview as part of this, particularly at firms under scrutiny. FD Capital’s guide on what to expect in an FCA SMF interview is worth giving to candidates early rather than the week before.
Timing: Do Not Make the Offer Contingent on Nothing
The gap between offer and approval is where firms carry the most risk and plan the least.
A candidate who has resigned elsewhere on the strength of your offer, and whose approval then runs into questions, is in a position neither of you wants. They are out of work, you are without a function, and the pressure on both sides pushes towards decisions that are worse than either party would make calmly. Experienced candidates know this, which is why many will not resign until approval is granted — and a firm that treats that as a lack of commitment has misread the situation.
The workable approach is to be explicit from the outset about what happens in each scenario: what the start date is contingent on, whether any interim arrangement is available while approval runs, and what the position is if questions extend the timetable. SMF Capital’s piece on SMF timing and eligibility questions covers when someone can actually begin.
Firms that have this conversation at offer stage lose fewer candidates during the wait, because the wait was expected rather than experienced as a sign that something has gone wrong.
If It Goes Wrong
If the candidate withdraws or the application is refused, the firm has two problems: an unfilled function and a timetable that has already consumed weeks.
The first thing to establish is whether the problem was the candidate or the role. If the concerns were specific to the individual, the search restarts and the lesson is about diligence. If the concerns related to how the role was described, or to the firm’s own position, putting a second candidate through the identical application is likely to produce the identical result.
The second is cover. Whatever the twelve-week position was when the process started, it has moved. Interim cover from someone already approved elsewhere, or who presents no diligence questions, is usually the fastest way to stop the gap while a permanent search runs properly. FD Capital’s page on temporary cover and the 12-week rule sets out the position, and SMF Capital handles the appointments through fractional and interim SMF cover.
The Candidate’s Side of It
Worth remembering that a refused or withdrawn application is far more consequential for the individual than for the firm. It sits in their history, it will be asked about, and it affects their ability to take functions elsewhere.
That asymmetry explains a good deal of candidate behaviour that firms find frustrating — the questions about the firm’s regulatory standing, the hesitation over an ambitious Statement of Responsibilities, the request to understand what the board actually expects. Those are not obstacles. They are a candidate assessing an exposure that lands on them personally, and FD Capital’s note on what senior managers risk sets out why.
The firms that attract strong candidates are the ones that engage with those questions rather than treating them as a lack of commitment.
The Bottom Line
Approval problems are mostly preparation problems. The history the regulator finds is history the firm could have found; the capacity question is one the firm could have asked; the mismatch between candidate and Statement of Responsibilities is one the firm wrote.
Do the diligence the regulator will do, describe the role as it actually is, keep the candidate engaged through the wait, and have an interim option in reserve. Most applications then proceed as firms expect — and the ones that do not become a delay rather than a crisis.
Appointing a senior manager?
We reference on judgement, capacity and history
Not just competence. We would rather raise something awkward during the search than have the regulator raise it during the application.
