How Consumer Duty Has Reshaped the SMF16 Compliance Oversight Role

From Conduct Compliance Manager to Substantive Customer Outcomes Owner

The 2023 introduction of Consumer Duty under PS22/9 has done more than tighten conduct expectations — it has structurally reshaped what the SMF16 Compliance Oversight role actually involves day-to-day. Where the role historically combined conduct rule monitoring, FCA dialogue management, and broad regulatory programme oversight, the post-Consumer Duty role increasingly centres on substantive customer outcomes ownership: building and defending an annual Consumer Duty Board Report, leading fair value assessment governance, owning vulnerable customer framework operation, and engaging FCA supervisory dialogue on outcomes that go far beyond traditional conduct compliance. For firms recruiting SMF16 in 2026, the role specification looks materially different from how it would have looked in 2022.

This blog examines how the role has shifted, what the new expectations look like in practice, and what hiring boards should look for in SMF16 candidates today. For the underlying framework, see our SMF16 Function Guide and Consumer Duty Pillar Guide.

The Pre-Consumer Duty SMF16 Role

Before Consumer Duty came into force in July 2023, the SMF16 role typically covered:

• Compliance monitoring programme oversight
• Conduct rule breach investigation and reporting
• Regulatory change management
• FCA supervisory dialogue and notifications
• Compliance training oversight
• Treating Customers Fairly framework operation
• Complaints handling oversight (DISP)
• Financial promotions review
• SM&CR compliance processes

The role was substantively about ensuring the firm followed regulatory rules — with TCF as one component among many. Customer outcomes mattered, but the framework operated largely through procedural compliance rather than substantive outcome testing. Strong SMF16 holders understood the regulatory framework well, ran effective compliance monitoring, and engaged FCA dialogue substantively. Customer outcomes were rarely the primary lens.

What Consumer Duty Has Added

The Consumer Duty has substantively expanded the SMF16 remit across multiple dimensions:

Substantive customer outcomes ownership

Where TCF allowed compliance demonstration through inputs (training delivered, complaints below threshold, satisfactory customer surveys), Consumer Duty requires substantive evidence of actual customer outcomes — value realisation, comprehension, vulnerable customer outcomes, and journey friction analysis. The SMF16 owns the framework that produces this evidence.

The annual Consumer Duty Board Report

Every in-scope firm must produce an annual Consumer Duty Board Report — and the SMF16 typically owns its production. The board report has become one of the most consequential documents in any firm’s regulatory positioning, examined substantively by the FCA during supervisory dialogue. See our Consumer Duty Annual Board Report blog.

Fair value assessment governance

Fair value assessments — substantive analytical work examining whether prices paid deliver fair value relative to benefits — sit at the intersection of compliance, commercial pricing, and customer outcomes. The SMF16 typically governs the process, even where commercial teams produce the analysis. See our Fair Value Assessment blog.

Vulnerable customer framework operation

Vulnerable customer adaptation must be integrated across all four Consumer Duty outcomes — not run as a separate framework. The SMF16 typically owns the integration, including the training, identification, support, and outcome monitoring components. See our Vulnerable Customers Guide.

Distribution chain governance

For firms in distribution chains — manufacturers and distributors — the SMF16 owns the information flow framework with counterparties. See our Distribution Chain Obligations blog.

Closed product book oversight

Following the July 2024 closed product extension, the SMF16 also owns substantive review of historic product books — frequently uncovering issues hidden by exit barriers and customer inertia.

The Senior Management Engagement Dimension

One of the most operationally significant changes is the substantive senior management engagement Consumer Duty requires. Where TCF could operate with relatively light board engagement — annual TCF reporting, periodic compliance updates — Consumer Duty requires substantive board ownership of customer outcomes.

For SMF16 holders, this means:

• Briefing the board substantively on outcomes — not just inputs
• Leading board challenge of fair value assessments
• Presenting vulnerable customer outcome data with substantive analytical support
• Engaging board committees on Consumer Duty implementation
• Supporting other SMFs (CEO, CFO, CRO) in their Consumer Duty accountabilities

The role has shifted toward what might be called “customer outcome leadership” — closer to a Chief Customer Officer dimension than a traditional compliance role. Strong post-2023 SMF16 holders combine deep regulatory knowledge with substantive board-level customer outcome stewardship.

FCA Supervisory Engagement Has Intensified

Beyond the role’s internal expansion, FCA supervisory engagement on Consumer Duty has intensified materially through 2024-2025. SMF16 holders now routinely manage:

• Substantive supervisory dialogue on Consumer Duty implementation
• Information requests on fair value, vulnerable customers, and outcome MI
• Thematic review participation
• Specific supervisory engagement on areas like cash savings rates, sludge practices, and closed product books
• Senior management attestations on Consumer Duty matters

The FCA dialogue capability — managing case officer relationships, drafting substantive regulatory communications, leading firm responses to supervisory questions — has always been part of SMF16 but has become more demanding in volume and substantive intensity since 2023. See our SUP Guide for the broader supervisory framework.

What This Means for Recruitment

The SMF16 candidate market has been substantively reshaped:

Experience profile

Candidates with pre-July 2023 senior compliance experience but no substantive Consumer Duty implementation history are increasingly less competitive. The 2023-2025 implementation period has produced a generation of senior compliance leaders with hands-on experience that can’t be substituted by general regulatory experience alone.

Specific implementation experience

Strong candidates demonstrate:

• Personal leadership of Consumer Duty implementation through to operational delivery (not just programme management to go-live)
• Direct experience producing annual board reports that withstood substantive challenge
• Hands-on fair value assessment design and review
• Vulnerable customer framework leadership
• FCA supervisory dialogue specifically on Consumer Duty matters
• Closed product book review experience post-July 2024

Compensation dynamics

Senior SMF16 compensation has risen meaningfully since 2023, reflecting both the expanded role and the tight candidate pool with substantive Consumer Duty experience. Hiring boards benchmarking on pre-2023 data typically find their offers below market.

Recruitment timeline

For senior SMF16 appointments specifically, the typical timeline runs 16-26 weeks end-to-end including notice periods (3-6 months) and FCA approval (12-16 weeks). Boards trying to compress this timeline frequently end up with compromised candidate selection.

What Hiring Boards Should Probe

Strong SMF16 candidates can substantively answer:

• How did you lead Consumer Duty implementation? What was the specific approach?
• What does your fair value assessment methodology look like, and how has it evolved?
• How do you measure outcomes substantively rather than just inputs?
• How does your annual board report engage substantively with adverse findings?
• How does your vulnerable customer framework integrate across the four outcomes?
• What FCA dialogue have you led on Consumer Duty? What were the outcomes?
• How did you address the July 2024 closed product extension?

Candidates whose answers stay procedural — describing the framework rather than substantive engagement with it — typically reflect compliance backgrounds that haven’t substantively transitioned to the Consumer Duty era.

Related Reading

For deeper detail on the framework and role: Consumer Duty Pillar Guide | SMF16 Function Guide | The Four Consumer Duty Outcomes | Cross-Cutting Rules & Principle 12 | Vulnerable Customers Under Consumer Duty | TCF and Consumer Duty | The Consumer Duty Annual Board Report | Fair Value Assessments | Distribution Chain Obligations