Regulated CFO Roles in London: What Changes When the Finance Job Is a Senior Manager Function
For most CFOs, a move between companies is a commercial decision: the business, the package, the people and the opportunity. For a CFO joining a bank, insurer, building society or other regulated financial services firm in London, there’s another party with a say in the appointment, and it isn’t on the interview panel.
At many regulated firms, the CFO holds a Senior Manager Function under the Senior Managers and Certification Regime (SMCR). At dual-regulated firms such as banks and insurers, that is SMF2, the Chief Finance function. The regulator must approve the appointment before the CFO can do the job, and once approved, the CFO is personally accountable for the areas set out in their Statement of Responsibilities.
London is where most of these roles are. It has the largest concentration of FCA and PRA-regulated firms in the UK and the deepest pool of CFOs with regulated experience, and it is also the most competitive market for them. This article looks at what’s different about regulated CFO roles in London, for finance leaders considering one and for firms trying to hire.
What SMF2 Actually Is
SMF2 is the Senior Manager Function for the person with overall responsibility for the management of the firm’s financial resources and for reporting to the board on them. It applies mainly to PRA-regulated firms: banks, building societies, insurers and large investment firms designated by the PRA. At solo-regulated FCA firms, the senior finance role is often not a separate Senior Manager Function, although a CFO who sits on the board may hold SMF3 (Executive Director) instead.
The practical effect is significant. An SMF2 holder needs to be approved by the PRA, with the FCA’s consent, before taking up the role. They hold a Statement of Responsibilities and are subject to the Senior Manager Conduct Rules, including the duty to take reasonable steps to ensure the business they’re responsible for is controlled effectively. Under the Duty of Responsibility, the regulator can take action against an SMF2 holder personally if something goes wrong in their area and they didn’t take reasonable steps to prevent it.
The regulators set out their expectations in their own material. The Prudential Regulation Authority publishes its approach to the regime for dual-regulated firms, and the FCA’s SMCR pages explain how it applies across the market. SMF Capital’s guide to SMF2, the Chief Finance function covers the role in more depth.
Why London Is Different
Regulated CFO roles exist across the UK, but London’s market has a character of its own.
Several markets in one city
The City and Canary Wharf house banks, insurers, asset managers and market infrastructure, many of them dual-regulated and therefore subject to SMF2. Mayfair and St James’s are home to hedge funds, private equity and private wealth firms, usually solo-regulated and leaner, where the CFO may also be a board director under SMF3, or may combine finance with operations. Shoreditch, Old Street and King’s Cross are where much of the UK’s payments, e-money and crypto-asset activity sits, with fast-growing firms that need finance leaders who can handle capital requirements, safeguarding and investor reporting at the same time.
Each of these markets values different experience. A CFO from a Canary Wharf bank will be strong on capital, liquidity and regulatory reporting. A CFO from a fintech will bring pace, fundraising and a tolerance for building things from scratch. Firms hiring in London need to be clear which kind of finance leader they actually need.
Overseas firms and UK branches
London is also where most overseas banks and insurers establish their UK presence. Some operate as subsidiaries with a full UK board and an SMF2. Others operate as branches, where the senior team may include a Head of Third Country Branch under SMF19 and a finance lead who must bridge UK requirements and an overseas parent’s reporting. These roles suit CFOs who are comfortable with matrix reporting and can explain UK regulatory expectations to a head office abroad.
The deepest pool, and the most competition
London has more CFOs with regulated experience than anywhere else in the UK. It also has more firms competing for them. The strongest candidates, especially those who have already held a Senior Manager Function, are rarely actively looking and usually have several options.
The Timetable Regulated CFO Hires Really Take
A regulated CFO appointment in London has three timelines that run one after another unless they’re planned in parallel.
| Stage | Typical timing | What helps |
|---|---|---|
| Search and shortlist | Three to five weeks for a well-briefed London search | A clear brief built around the Statement of Responsibilities, not a generic job description |
| Notice period | Three to six months for senior London finance leaders | Discuss buy-outs of deferred awards early; keep the candidate engaged |
| Regulatory approval | The regulator has a statutory period to decide; complete applications move faster | Start regulatory references and the application during the notice period |
Run end to end, a London SMF2 appointment can take the best part of a year. Run in parallel, with the application prepared and references gathered while the candidate works their notice, it can be considerably shorter. SMF Capital’s article on managing the gap between offer and approval covers how firms keep candidates committed during that period.
What Firms Look For in a Regulated CFO
The technical finance skills are a given. What distinguishes a strong regulated CFO candidate is a combination of things the regulator will also look at.
- Relevant regulatory experience. Capital adequacy, liquidity, regulatory returns and, for insurers, Solvency UK. Experience of working with the PRA or FCA directly is a significant advantage.
- Board presence. A regulated CFO reports to the board and its audit and risk committees, and must be able to challenge as well as inform.
- A clean regulatory record. Previous approvals, regulatory references covering the last six years and directorships all form part of the fit and proper assessment.
- Control mindset. The Duty of Responsibility means a CFO must be able to show they took reasonable steps: good management information, clear delegation and a documented response to issues.
For finance leaders aiming for their first regulated CFO role, the gap is usually evidence rather than ability. Deputising formally for an existing SMF2, attending the board and its committees, and taking on direct contact with the regulator all build the track record the regulator looks for.
Pay and Structure
London pay for regulated CFOs is the highest in the UK. At larger firms, packages often include variable pay subject to the regulators’ remuneration rules, with deferral, malus and clawback. When a CFO moves, unvested deferred awards from their current employer are usually forfeited, so buy-out arrangements are a normal part of a senior move and should be discussed early rather than at the offer stage.
Not every London regulated firm needs a full-time CFO. Smaller asset managers, wealth firms and fintechs often use fractional or interim finance leaders, and where the role isn’t a Senior Manager Function, that can be a very effective model. Where it is, the regulator will look carefully at whether a part-time arrangement gives the firm enough senior attention for its size and risks.
How Regulated CFO Searches Should Be Run
Recruiting a regulated CFO is a regulatory process as well as a recruitment one. The searches that go well have a few things in common:
- They start from what the CFO will be accountable for, including the draft Statement of Responsibilities.
- They test candidates for approvability, including previous approvals, references and regulatory history, before the shortlist rather than after the offer.
- They plan the notice period and the approval application side by side.
- They are realistic about competition, counter-offers and the time strong candidates need to make a move.
SMF Capital, a sister practice within The Capital Recruitment Group, specialises in exactly these appointments. Its SMF recruitment London page explains how it runs Senior Manager searches across the London market, including the sectors it covers and what London hiring looks like in practice. For CFO searches specifically, see its page on Chief Financial Officer recruitment (SMF2), and for the full list of Senior Manager Functions, its complete guide to SMF designations.
For CFOs Considering a Regulated Role
A regulated CFO role in London can be one of the most rewarding positions in UK finance: board-level influence, real accountability and a seat at the centre of one of the world’s major financial markets. It also carries personal regulatory exposure that most commercial CFO roles don’t.
Before accepting, do your own due diligence. Ask about open regulatory issues, the state of the finance function and its systems, the quality of management information, the resources you’ll have and why your predecessor left. You’ll be accountable for what you inherit from your first day in the role, so it’s worth knowing what that is before you sign. SMF Capital’s guide to due diligence before accepting an SMF role sets out the questions to ask.
About the author: Adrian Lawrence FCA is the founder of The Capital Recruitment Group, including FD Capital and SMF Capital, which recruits Senior Managers for FCA and PRA-regulated firms. He is a Chartered Accountant and Fellow of the ICAEW and a former listed-company Finance Director, and leads every senior search personally.
