One of the key messages behind the Senior Managers and Certification Regime is that firms must take responsibility for ensuring that individuals are fit and proper to carry out their roles. While this assessment is particularly important during recruitment, it should never be viewed as a one-off exercise completed at the point of hiring.
Circumstances can change over time. An individual’s financial situation, personal circumstances, or professional conduct may alter in ways that could affect their suitability to continue performing their role. For this reason, firms should ensure that their Fit and Proper assessments form part of an ongoing governance process, rather than relying solely on checks carried out during recruitment.
One practical way to support this is by introducing annual Fit and Proper declarations for staff and advisers. These declarations allow individuals to confirm whether there have been any changes to their circumstances that the firm should be aware of. In many cases this will simply confirm that nothing has changed, however it also creates an opportunity for individuals to disclose matters that may need to be considered by the firm.
Maintaining this regular review process not only strengthens a firm’s oversight arrangements, but it also demonstrates a proactive approach to regulatory compliance. Should the FCA ever review a firm’s governance arrangements, having evidence that Fit and Proper assessments are reviewed regularly can provide valuable reassurance that the firm takes its responsibilities seriously.
