Section 166 Skilled Person Review: What It Really Means for Your Firm and How to Face It Prepared

A Section 166 skilled person review is one of the most significant regulatory interventions an FCA-regulated firm can face. It is not a routine supervisory visit. It is a deep, independent examination of your firm's systems and controls — commissioned by the regulator, paid for by you, and with findings that go directly back to the FCA.

The power to require a skilled person review sits within Section 166 of the Financial Services and Markets Act 2000, and the FCA uses it when it has concerns serious enough to warrant independent scrutiny. That might follow a supervisory visit, a whistleblower report, a significant operational failure, or a pattern of regulatory returns that has attracted attention. Whatever the trigger, the message is the same: the FCA does not believe it has sufficient visibility of what is happening inside your firm — and it intends to find out.

In this episode, we examine what a Section 166 review actually involves, how firms should prepare, and why the difference between a firm that navigates the process well and one that does not almost always comes down to preparation, documentation, and cultural readiness.

Whether you are a compliance officer, an MLRO, a senior manager with regulatory accountability under SMCR, or a board member facing your first s166 notification, this episode gives you the practical framework to understand the process and respond to it effectively.

We cover:

— What Section 166 actually is: the legal basis, when the FCA uses it, and what the notification means for your firm's regulatory relationship

— The skilled person appointment process: who gets appointed, how they operate, what their mandate covers, and the critical distinction between acting for the FCA and advising your firm

— Immediate priorities on notification: the actions your compliance team, MLRO, and senior managers must take in the first days and weeks

— Document and evidence readiness: what skilled persons typically examine, how to ensure your records, policies, and MI reflect actual practice, and why inconsistency across documentation is one of the most damaging findings

— Individual accountability under SMCR: how the review process intersects with Senior Manager accountability, what examiners expect from named function holders, and the personal risk that attaches to inadequate responses

— Common subject areas: financial crime controls, AML governance, Consumer Duty implementation, complaints handling, operational resilience, and culture and governance arrangements

— Managing the review itself: how to engage constructively with the skilled person, handle information requests efficiently, and avoid responses that expand the scope of examination unnecessarily

— Interpreting and responding to findings: how to approach the remediation plan, demonstrate genuine commitment to improvement, and use the process to rebuild regulatory confidence

This episode is essential listening if your firm:

— Has received or is anticipating a Section 166 notification

— Has recently undergone an FCA supervisory visit with outcomes that raised regulatory concern

— Has significant gaps in its compliance documentation, governance records, or management information

— Wants to understand the s166 process before it becomes an immediate operational reality

Resources mentioned in this episode:

Compliance Consultant's Section 166 Skilled Person Review Preparation Toolkit is a comprehensive, ready-to-use resource for FCA-regulated firms. It provides a structured preparation framework, document readiness checklists, individual briefing guides for senior managers, and remediation planning templates — everything your firm needs to engage with the s166 process in an organised, evidenced, and credible manner.

Built by qualified regulatory consultants who know exactly what "good" looks like.

Visit complianceconsultant.org to find out more, or call us on 0800 689 0190.

Compliance Consultant — Making Compliance Work.