The Money Laundering Reporting Officer is the appointment where getting it wrong is most visible. The SMF17 holder decides whether a Suspicious Activity Report goes to the National Crime Agency, owns the firm’s anti-money-laundering systems, and carries personal responsibility for both. Firms that treat it as a box to tick find out it was not, usually during a supervisory visit.
FD Capital recruits MLROs and deputy MLROs on a permanent, part-time, fractional and interim basis for payments and e-money firms, consumer credit lenders, wealth managers, insurance distributors and cryptoasset businesses. For the regulatory detail of the function itself, our SMF17 MLRO guide is the place to start. This page is about hiring one.
What the role actually involves
SMF17 derives from both the FCA Handbook and the Money Laundering Regulations 2017, which is part of what makes it distinct from other senior management functions. The holder receives internal suspicion reports, decides what is escalated to the NCA, oversees transaction monitoring and customer due diligence, produces the MLRO annual report for the board, and answers for all of it.
The decisions are rarely clear-cut. A good MLRO is someone who can hold a defensible position on an ambiguous case and document why, not someone who files everything defensively or waves things through to keep onboarding moving. Both failure modes are common and both are visible in a file review.
Permanent, fractional or interim
Volume is the deciding factor more than it is for SMF16. Once a firm is generating a meaningful flow of alerts and escalations, the MLRO workload becomes continuous and a part-time arrangement stops being credible.
Permanent is right where alert volumes, onboarding flow or regulatory scrutiny mean the work is genuinely daily. For most payments firms past early growth, that point arrives sooner than expected.
Fractional works for smaller firms, firms in or approaching authorisation, and businesses whose model generates limited AML risk. Two to three days a month buys real seniority. Where the same person also covers Compliance Oversight, see fractional dual SMF16 and SMF17 recruitment; where you need an outsourced arrangement specifically, our MLRO recruitment practice covers the full range.
Interim matters more here than almost anywhere. An MLRO vacancy is not a role sitting empty; it is a firm with nobody making SAR decisions. If yours has resigned, read temporary cover and the 12-week rule before you do anything else.
Deputy MLROs
Firms often focus on the SMF17 appointment and give no thought to the deputy until the holder takes leave. A nominated deputy who is properly briefed, has access to the same systems and has actually made decisions is the difference between an orderly fortnight and an escalating problem. We recruit deputies as a matter of course, and our AMLRO and deputy MLRO page covers that side of it.
What an MLRO costs
MLRO compensation varies more widely than almost any compliance role, because the title covers everything from a part-time holder at a small broker to a full function head at a large payments business with a monitoring team beneath them.
Firm type drives it more than years of experience. A cryptoasset business or a high-volume payments firm will pay materially more than a small directly authorised intermediary for the same nominal title, because the risk profile and the workload are different. Fractional holders are engaged on a day rate against an agreed minimum number of days, which is usually the cheaper route for firms that genuinely do not need the role daily.
Our compliance salary guide carries current benchmarks by role and firm type and is kept updated rather than tied to a particular year. For a specific role, a short conversation will give you a far more reliable figure than any published band.
What good looks like
Strong MLRO candidates have made difficult SAR decisions and can talk you through the reasoning without naming the firm. They understand the consent regime in practice rather than in theory — our note on DAML requests and how the consent regime works is the level of detail we expect them to be comfortable at. They have been through a file review or a supervisory visit. And they are willing to be unpopular.
Technical knowledge of transaction monitoring matters, particularly the ability to tell you whether a system is producing useful alerts or simply producing noise. A candidate who has tuned a monitoring system, rather than only operated one, is worth more than their CV suggests.
The fit and proper assessment applies as it does to any senior management function, and we check it early. For fractional candidates we also ask directly how many other senior management functions they hold, because capacity is a real constraint and the regulator has taken an interest in it.
The two areas candidates get tested on
When we reference an MLRO candidate, two areas reliably separate the strong ones from the merely qualified.
The first is SAR quality. Filing volume tells you very little; what matters is whether the reports are useful to the people receiving them. Candidates who have had feedback on their filings, or who have thought about what makes a report actionable, are a different proposition from those who have only ever met an internal deadline. Our note on what NCA reviewers look for in a SAR covers the ground we expect candidates to be comfortable with.
The second is transaction monitoring. Most firms are drowning in alerts that mean nothing, and an MLRO who can tell the difference between a system that is working and one that is generating noise will save you far more than the difference in day rate. We ask candidates directly about tuning and thresholds; our piece on tuning transaction monitoring sets out why it matters.
Neither question is about qualifications. Both are about whether someone has done the job rather than held the title.
Why MLRO searches go wrong
The most common failure is appointing someone whose experience sits in a different risk profile. An MLRO who has run AML at a low-risk intermediary is not automatically equipped for a cryptoasset business or a cross-border payments firm, and the gap shows up in exactly the cases where judgement matters most.
The second is treating the appointment as a compliance formality. Where the MLRO has no real authority to stop onboarding or exit a relationship, the firm has the function on paper and the risk in practice.
The third is underestimating the time. Firms frequently scope an MLRO engagement at a day a month and discover the alert volume alone needs more. We would rather size it honestly at the outset, even where that means quoting a number you were not hoping for.
Sectors
Payments and e-money firms are the largest part of our SMF17 work, followed by cryptoasset businesses, consumer credit, wealth management and insurance. Cryptoasset firms bring registration, travel rule and banking-relationship complications we have set out in SMF16 and SMF17 for cryptoasset firms.
Alongside SMF17 we recruit SMF16 Compliance Oversight holders, chief compliance officers, financial crime specialists and SMF2 regulated CFOs, with broader hiring handled through our compliance recruitment practice.
Approval and timing
SMF17 is a pre-approval function, so the individual cannot act until the FCA has approved them. That means a Form A through Connect, a Statement of Responsibilities and evidence supporting fit and proper. Our guide on how long FCA SMF approval takes explains what drives the timetable, and SMF appointments during FCA authorisation covers the position for firms not yet authorised.
Because an MLRO vacancy is more urgent than most, the gap between resignation and approval is the risk to manage. Starting the search on the day notice is given, rather than at the end of the notice period, is usually the difference between continuous cover and a gap.
Frequently asked questions
Can an MLRO be part-time or outsourced?
Yes. Many smaller firms engage a fractional or outsourced MLRO, and the FCA accepts the arrangement where it is proportionate. The firm retains the obligations and the individual retains personal accountability regardless of the contract.
Do we need a deputy MLRO?
You need someone who can act when the MLRO is unavailable, properly briefed and with system access. Firms that skip this discover the problem at the least convenient moment.
Can one person hold SMF16 and SMF17?
At smaller firms, commonly yes. Our dual SMF16 and SMF17 page covers when it works and when the functions should be separated.
How quickly can you place an MLRO?
Shortlists on fractional and interim mandates generally go out within 72 hours. FCA approval is then the constraint, not candidate supply.
What does an MLRO earn?
It depends heavily on firm type and transaction volume. Our compliance salary guide has current benchmarks, and we will give you a view on your specific role.
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About the author
Adrian Lawrence FCA
Adrian is the founder and Managing Director of FD Capital. A Chartered Accountant and ICAEW Fellow, he became a finance director at 28 and has spent more than 25 years at C-suite level, including as finance director of a listed company and of a private equity backed management buy-out. Every search is run by our specialist team, with Adrian overseeing each mandate.
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