The FCA’s recent business model review has brought fresh clarity on what good looks like for smaller asset managers. The findings, based on surveys sent to over 400 firms and deeper engagement with 60 respondents, were aimed at those with less than £1 billion in assets under management. For many businesses in the 10 to 50-person range, the review has implications that go far beyond risk frameworks and governance structures. It also raises important questions about whether the compliance leadership and team structure in place are sufficient for the regulatory road ahead.

This is not legal advice. It is market guidance based on what we see when working with clients across the buy-side. Firms should always take professional legal and compliance advice when interpreting FCA findings or changing their internal frameworks.

The FCA has made it clear that smaller firms are expected to demonstrate the same quality of risk management, governance, and operational resilience as larger peers. The regulator does not lower the bar for leaner teams. That creates a practical challenge for asset managers operating with a single Head of Compliance or CF10, often supported by one or two junior staff. Where one individual previously juggled monitoring, policy updates, regulatory returns, and board reporting, the new environment requires more bandwidth, deeper documentation, and greater evidence of second-line challenge. It is worth asking whether your current set-up can deliver this without creating bottlenecks or exposing the firm to unnecessary risk.

The role of the Head of Compliance in a sub-£1B AUM asset manager is already broad. In smaller teams, the job often combines compliance oversight, MLRO responsibilities, training, and sometimes operational tasks. The FCA business model review has reinforced the need for sharper strategic risk awareness, stronger board-level communication, and the ability to demonstrate, through data and documentation, that governance processes are not only in place but actively used to challenge and improve the business. These capabilities have always been valuable but are now essential for the compliance function to be seen as credible by both the regulator and internal stakeholders.

For many 10–50 person firms, the question is whether to add resource beneath or alongside the Head of Compliance. The right answer depends on growth trajectory, product complexity, and the firm’s appetite for proactive regulatory engagement. Additional second-line support can free the Head of Compliance to focus on strategic input, horizon scanning, and higher-quality board reporting. It can also strengthen resilience by ensuring more than one person has deep knowledge of core compliance processes. This might involve hiring a compliance officer with strong monitoring and reporting skills, engaging a fixed-term contractor during periods of regulatory change, or partnering with a consultancy for specific projects while retaining in-house oversight. The FCA’s findings make it harder to justify a stretched, single-point-of-failure model.

The market for experienced compliance professionals with asset management backgrounds remains tight. Many have already been through periods of regulatory scrutiny and understand the pressures. That experience is valuable but also in high demand. Firms looking to hire must balance the ideal skills profile with cultural fit, flexibility, and realistic salary expectations. Fram Search has worked with clients across the buy-side to hire Heads of Compliance, deputies, and compliance officers, often in firms of fewer than 50 people. We understand the trade-offs involved and how to access passive candidates who may be open to a move if the opportunity is well positioned.

The FCA business model review is not simply another set of findings to file away. For smaller asset managers, it is a timely prompt to review whether the compliance leadership structure is still fit for purpose. In an environment where expectations are rising but resources are finite, the right person - or the right combination of people - in compliance leadership can be a genuine competitive advantage. If you are reviewing your compliance set-up or planning your next senior hire, we would be pleased to discuss how to structure the search to attract the right talent.