Hiring an FC for a Broker or MGA: What to Test

Interviewing a Financial Controller for an insurance Intermediary is one of the harder assessments in regulated finance, because the differentiating knowledge is narrow and a generalist interview will not reach it. A candidate can be entirely credible on the close, the balance sheet and the audit and still not know whether the money in the client account belongs to the client or the insurer — which is the single fact everything else in the role rests on. This guide sets out what to test, the questions that reach it, the red flags, and how to specify the role so the shortlist contains people who have done it. For what the role itself involves, see our guide to finance in insurance intermediaries.

What you are testing beyond the standard

Assume the general FC capabilities are being assessed as normal — ownership of the close, balance sheet substantiation, the audit relationship, leading a team. Our employer’s guide to interviewing a Financial Controller covers those. On top of them, four sector-specific capabilities determine whether the appointment works.

Client money under CASS 5 — the calculation, the reconciliation, and the judgement about what falls into it.

Risk transfer — understanding that it is conferred by agreement rather than assumed, and knowing how to verify it.

Sector accounting — commission recognition, IPT, and where relevant bordereaux and delegated authority.

And regulatory rhythm — comfort with obligations that are dated and non-negotiable rather than internally set.

The questions that reach it

1. Explain risk transfer to me in your own words. The single best question in the set, and it takes two minutes. Someone who has genuinely worked in an intermediary explains it as a function of the terms of business agreement and describes both sides. Someone who has read about it describes a definition. Follow up with: how do you satisfy yourself it applies? The answer should involve reading the agreements, not assuming from practice.

2. Walk me through your client money calculation, step by step. Sources, categories, timing, what is included and excluded. Owners describe the awkward parts — unallocated cash, in-flight settlements, mid-term adjustments — without prompting.

3. Statutory or non-statutory trust, and why? Tests whether they understand the working capital and regulatory consequences of the choice, or merely know the terms.

4. Tell me about a client money shortfall or a discrepancy. Anyone who has run this has had one. Strong answers describe identification, quantification, making good, and reporting — not a claim of a perfect record.

5. What did your CASS auditor raise, and what changed? Ownership of findings, and it also confirms they have actually been through a CASS audit rather than only a statutory one.

6. How do you handle unallocated cash? Every broker has some. The answer reveals both process discipline and their relationship with the operational side of the business.

7. When do you recognise commission? Instalments, return premiums, mid-term adjustments, and any profit or contingent commission. This is where the sector meets revenue recognition and where auditors focus.

8. [If MGA or delegated authority] Talk me through your bordereaux reconciliation. Frequency, what is matched, how differences are cleared. Ageing differences are the sector’s recurring failure and an experienced candidate will say so.

9. If you joined on Monday, what would you look at first? Experienced intermediary FCs have a checklist — the risk transfer mapping, the age of unallocated cash, when the calculation was last independently reviewed. The answer reveals depth in ninety seconds.

Two practical tests worth adding

Give them a real calculation. An anonymised client money calculation and twenty minutes, with the question: what would you check, and what looks wrong? It reveals more than any question set, and candidates who have done this find it interesting rather than intimidating.

And involve your compliance lead in one stage. If you lack CASS expertise on the interview panel, this is the single most effective thing you can do — the same advice applies to any regulated finance hire, as our guide to hiring regulatory experience sets out.

Red flags

Using CASS 5 and CASS 7 interchangeably. The clearest signal that the experience is from an adjacent regime rather than this one.

Describing risk transfer as a property of the insurer relationship rather than of the written agreement.

Vagueness about the CASS audit from someone claiming to have owned client money — it is an annual event with findings, and anyone who has been through one remembers it.

No example of a discrepancy or breach. Either they have not owned it or they are not being straight.

Treating unallocated cash as an operations problem. It is a client money problem with an operational cause, and an FC who does not own it will let it age.

And a general-practice audit background with no intermediary clients, presented as sector experience.

Specifying the role

Four things that transform the shortlist, and most specifications include none of them.

Name the regime and the model. “CASS 5 client money, non-statutory trust, mixed risk transfer” is a filter that reaches the right pool. “Regulated environment experience” is not.

State whether the role is the CASS oversight function. In smaller firms it frequently is, which is a materially different job carrying personal visibility to the regulator — see CASS oversight versus operations.

Say whether there is delegated authority, because bordereaux and underwriting accounting narrow the pool considerably and price above.

And describe the starting position honestly — the unallocated cash that has aged, the risk transfer mapping nobody has refreshed, the calculation that has never been independently reviewed. Candidates worth hiring read that as the reason the role exists.

When adjacent experience is acceptable

The CASS 5 pool is small, so pragmatism matters. A candidate from CASS 7 or another client money regime is frequently a reasonable appointment where three things hold: they have genuinely owned a reconciliation and a calculation rather than reviewed one; they have been through a client money audit; and there is existing CASS 5 knowledge in the firm or in the adviser relationship to support the first six months.

Where none of that holds — an intermediary with no internal CASS expertise appointing its sole finance resource from a different regime — the risk is real and it is the configuration in which breaches go unnoticed longest. In that situation an interim with CASS 5 experience alongside the permanent appointment for the first quarter is a proportionate answer.

Qualification — ICAEW, ACCA or CIMA — is the baseline and worth verifying; the sector experience is what you are actually buying.