Appointing a new AR – ‘A Common Question’

At RWA, we are often approached and asked if an insurance broking firm, which is directly authorised by the FCA, can appoint an Independent Financial Adviser (IFA) or mortgage broker as an appointed representative (AR).

The answer is generally no.

If the IFA or mortgage broker is already directly authorised by the FCA or some other body, such as a Designated Professional Body (DPB), typically the Institute of Chartered Accountants in England & Wales (ICAEW) or the Royal Institution of Chartered Surveyors (RICS), then they CANNOT be an AR of another directly authorised firm. A list of designated professional bodies and other financial services organisations can be found here.

They would have to be a professional introducer and have the appropriate Part 4A Permissions to introduce general insurance.

There is one exemption to this rule.

If a firm has consumer credit-only permissions and these are on a ‘limited’ basis, then that firm can be an AR of an insurance broker for insurance distribution activities.

For completeness, if the firm is a ‘full permission’ firm, it cannot also be an AR and would need to be a professional introducer; the firm would need the relevant Part 4A Permission to introduce general insurance customers and products.

About the author

Terence has over 35 years' experience in the Financial Services environment, covering general insurance, investments and mortgages.

Before joining RWA, Terence worked for a large PLC insurance brokerage in Manchester, overseeing some 20 acquisitions. He served as Compliance Director at RWA from 2011 to 2018 and has worked with insurance broking firms of all sizes across the UK. He has a particular interest in Financial Crime and the protecting the insurance broker. Terence previously served as Executive Chairman of the Association of Professional Compliance Consultants (APCC), the professional body for the compliance consultancy sector.

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