Navigating an FCA S166 Review: A Talent-Led Approach

An S166 is the FCA’s way of saying: “We need independent eyes on a particular area of your business.” It could relate to financial crime, conduct risk, client asset handling, governance, culture, or other key areas.

The moment it lands, priorities shift. Board agendas change overnight. Day-to-day operations are no longer the main focus, remediation and regulatory engagement take centre stage.
From the very start, you need to appreciate that:

• Timeframes are tight. The FCA and Skilled Person will expect immediate cooperation and fast access to information.
• Business as usual will suffer unless you resource correctly. This is a major distraction for senior leadership and your BAU teams.
• The scope can evolve as the Skilled Person digs deeper, requiring even more resources than initially anticipated.

1. Pace of Response

The S166 process moves fast. You can’t take weeks to assemble a plan or hire the right people. Every day counts, delays can be interpreted as a lack of cooperation or capability.

2. Specialist Knowledge Gaps

The review will focus on a specific area, whether it’s transaction monitoring, SMCR governance, CASS oversight, or conduct frameworks. If your internal team lacks deep expertise in that niche, you’ll need external help.

3. Strain on Internal Resources

Even if your team has the skills, they’re already busy running the business.
Expecting them to handle the review on top of BAU work is a recipe for burnout and missed deadlines.

4. Coordination Across Stakeholders

The Skilled Person, the FCA, internal teams, external counsel all will want updates. Clear communication lines and an accountable project lead are non-negotiable.

This is where we see the most successful firms get it right: they bring in targeted, short-term expertise, people who’ve been through S166s before and can slot straight in.
The profile of those hires will depend on the review’s focus:

• Financial Crime / AML Reviews – Senior Financial Crime Consultants,
  former MLROs, sanctions specialists, transaction monitoring experts.
• Governance & Culture Reviews – Senior SMF holders, board governance
  advisors, conduct risk specialists.
• CASS Reviews – Experienced CASS oversight officers, reconciliation
  specialists, auditors with CASS experience.
• Operational Resilience Reviews – Programme managers with resilience testing experience, IT risk specialists, BC/DR consultants.

The key is relevance, these are not generic contractors but people who can hit the
ground running with immediate credibility in front of regulators and Skilled Persons.

If you’re under S166, you’re in a race against the clock. From the moment you get
the letter, you should be thinking:

• Who is leading this internally?
• Where are our capability gaps?
• Which trusted partners can help us plug them fast?

We’ve seen firms that try to “make do” with existing resource lose valuable time and
fall behind in their remediation plans. By contrast, those that deploy the right interim
specialists early often not only meet deadlines but also emerge with stronger
frameworks and improved regulatory relationships.