Welcome to today’s episode, where we’re unpacking one of the most important regulatory tools in UK financial services: the Section 166 Skilled Person Review. If you’re a regulated firm, compliance professional, or senior leader in financial services, this is a topic you can’t afford to ignore.
Today’s episode is inspired by the insights shared on the FD Capital page about Section 166 reviews, and we’ll walk through what they are, why they happen, and how firms can respond effectively.
A Section 166 review, often called a Skilled Person Review, is a regulatory tool used by the UK Financial Conduct Authority, or FCA. Under Section 166 of the Financial Services and Markets Act, the FCA can require a firm to appoint an independent third-party expert – a “skilled person” – to investigate specific areas of the firm’s business and produce a report.
These reviews usually happen when the regulator has concerns about a firm’s activities or wants deeper insight into potential issues. Instead of relying solely on internal information, the FCA brings in an independent specialist to analyse the situation and provide objective findings.
And here’s an important detail: the firm being reviewed typically pays for the cost of the investigation, which can sometimes be significant.
So why might a firm face a Section 166 review?
There are several common triggers. Weak risk management frameworks, concerns about governance or internal controls, potential financial crime issues, or questions around compliance with regulatory requirements can all lead the FCA to request a skilled person report.
Sometimes the FCA uses this process simply to gain deeper understanding of a firm’s systems and controls. Other times, it can be a precursor to enforcement action or remediation work if serious issues are uncovered.
From the regulator’s perspective, a Section 166 review is a powerful supervisory tool. It allows the FCA to obtain expert analysis quickly and independently, helping it determine whether firms are meeting regulatory expectations and protecting consumers.
For firms, however, the experience can be challenging.
Section 166 reviews can be complex, time-consuming, and resource-intensive. They often require extensive documentation, interviews with senior staff, and detailed analysis of systems, controls, and governance processes.
That’s why preparation and expert guidance are critical.
One of the most important steps for firms is engaging experienced regulatory advisers early. Skilled support can help shape the scope of the review, manage communication with regulators, and ensure the firm responds effectively to the findings and recommendations.
In many cases, the difference between a disruptive investigation and a manageable regulatory process comes down to preparation, governance, and expert leadership.
To find out more visit www.fdcapital.co.uk/section-166-review/
This is where specialist financial recruitment and advisory firms like FD Capital can play a role.
The key takeaway from today’s episode is simple: Section 166 reviews are serious, but they’re also manageable with the right approach..
If you’d like to learn more about Section 166 reviews, how they work, and how firms can prepare for them, visit the dedicated guide on the FD Capital website.
Just search for FD Capital Section 166 Review, where you’ll find detailed insights into the process and practical guidance for regulated firms.
Thanks for listening to today’s episode. If you found this helpful, don’t forget to subscribe, share it with colleagues in the financial services industry, and join us next time as we continue exploring the issues shaping regulation, leadership, and finance in the UK.