The four routes
Every company that ends up with a fractional CFO got there one of four ways. Nobody sets them out side by side, because almost everybody writing about it sells one of them.
| Route | What you get | Typical cost | Time to start |
|---|---|---|---|
| A fractional CFO practice | A firm assigns one of its people to you, with the firm's methods behind them | A monthly fee to the firm, usually with a minimum term | Two to six weeks |
| An executive recruiter | A search run for you, ending in a shortlist you interview | A fee for the search, often a percentage of first-year value | Four to ten weeks |
| A marketplace or bench | You browse verified people and contact the ones you want | £800 to £1,500 a day, paid to the operator | Days to three weeks |
| Your own network | Somebody you already trust, or a referral from somebody you do | Whatever you agree, with no third party in it | Unpredictable |
A fractional CFO practice
A practice employs or contracts a group of CFOs and assigns one to you. The appeal is real: there is a methodology behind the person, somebody to escalate to if it goes wrong, and cover if they are ill or leave.
The trade is control and cost. You are usually assigned rather than choosing, the fee goes to the firm and the CFO is paid out of it, and a minimum term is common. If the person does not fit, the firm will normally swap them, which solves the problem but means starting the relationship again.
This route suits a company that wants the process handled and is willing to pay a margin for it, and it genuinely does suit some.
An executive recruiter
A recruiter runs a search against your brief and brings back people, including people who are not advertising themselves anywhere. That is the thing a search does that browsing cannot: it reaches the person who is not looking.
It is the slowest route and the most expensive per hire, and for a one-day-a-week seat the economics often do not work. Where it earns its fee is a hard brief: an unusual sector, a regulated function, a market where very few people qualify.
This is a legitimate model and it is worth saying so plainly. It is also what this company sells as Operator Search, at £999 to run a search and £2,500 only if you hire, so treat the paragraph above as an interested opinion and check it against anybody else you talk to.
A marketplace or bench
You look at the people directly, see what they have done and what they charge, and contact the ones that fit. There is no assignment and no intermediary in the relationship: you contract with the person and pay them.
It is the fastest and usually the cheapest of the four, because nothing is taken out of the middle. What it asks of you is judgement. Nobody is shortlisting on your behalf, so you have to know what you are looking for, which is why the interview questions and the red flags on this site are published in full and free.
The risk to watch for is a marketplace where placement can be bought. If an operator can pay to appear higher, the order you are shown is an advertising ranking rather than a fit ranking, and you cannot tell by looking. Ask directly.
Your own network
The best outcome when it works, because trust is already established and there is no fee anywhere. Two reasons it often does not: your network has a limited number of senior finance people in it, and the ones it does have may be wrong for your stage without either of you being able to tell in advance.
It is also the hardest route to run a fair process on. Turning down somebody you know is harder than turning down a stranger, and companies routinely hire the person they knew rather than the person they needed.
Which one to choose
- A dated trigger, a raise or a covenant or a board forming, and you know what you need: the bench, because speed matters more than process.
- An unusual or regulated brief where you are not sure who qualifies: a search, whether ours or somebody else's.
- You want the whole thing handled and cover if the person leaves: a practice, and accept the margin as the price of that.
- Somebody trusted is already in view: your network, but run a real interview anyway.
Questions
- How much do fractional CFO services cost in the UK?
- It depends entirely on the route. Through a bench, a fractional CFO typically charges £800 to £1,500 a day and is paid directly, so one day a week lands roughly between fifty and seventy-five thousand pounds a year. Through a practice you pay the firm a monthly fee instead, which is usually higher for the same days because the firm's margin sits inside it. Through a recruiter you pay a one-off search fee on top of the operator's own rate.
- Is a fractional CFO service the same as outsourced finance?
- No. Outsourced finance is a team doing the work: bookkeeping, payroll, management accounts, month end. A fractional CFO is one senior person doing the judgement: what the numbers mean, what the company can afford, what to tell the board. Many companies need both, and the fractional CFO is usually the one who tells you which outsourced provider to use.
- Do I sign a contract with the CFO or with the platform?
- That depends on the route and it is worth establishing before anything else. On a bench like this one the contract is directly between you and the operator, and nothing is taken from what you agree. Through a practice the contract is usually with the firm. Through a recruiter you contract with the person and pay the recruiter a separate fee.