The number of managers who can be held personally responsible for misconduct will reach 72,000 after the extension of the senior managers regime, according to new research.
The data, which comes from the regulator and provided to financial services law firm Cleveland & Co under a Freedom of Information request, showed this was an increase on the 3,159 managers that the regime applied to in 2016.
Last month the Financial Conduct Authority published plans to extend the senior managers regime to the whole financial services sector, including advisers, next year.
Under the regime, anyone who holds a senior management function at an advice firm will need to be approved by the FCA and every senior manager will need to fill out a statement of responsibilities explaining what they are responsible for.
The regime had previously applied only to banks, building societies, credit unions and PRA-designated investment firms.
Emma Cleveland, managing director of Cleveland & Co, said: “The scale of the increase highlights the size of the task that many companies face.
“While the biggest companies with larger budgets should be able to handle the regulatory changes, it is smaller companies with the biggest mountain to climb.
“Understanding the rules and rolling out extra training – not just for senior staff - will take large chunks out of comparatively smaller budgets.
“It’s imperative that firms don’t leave introducing changes until the last minute and seek advice sooner rather than later.”
Ms Cleveland said firms included in the regime will have to overhaul compliance teams and commit further resources to training their staff on the regime’s requirements.
The regime sets out a series of “prescribed responsibilities” which firms will need to give their senior managers, but these will not apply to some firms – including sole traders of firms – and larger firms will have more responsibilities.
damian.fantato@ft.com
