The expansion of the SMCR to cover all FCA regulated firms (from 9 December 2019) will change the way in which the directors and senior managers in those firms will approach risk. The SMCR has already closed the gaps between responsibilities within the banking and insurance sector and has made senior managers within those sectors much more cognisant that their conduct or lack of it has real consequences, not just for their firms but for them personally.

Typically some of the smaller FCA only regulated firms have operated on a more informal basis than their peers in the banking sector. The introduction of the SMCR will encourage individuals within smaller brokers, fund managers, IFAs etc. to consider the risks inherent to their activities with much greater rigour.