The Dangers of Inadequate and Ineffective Appointed Representatives

The FCA has done a lot of work on Appointed Representatives (or AR, for short – an individual, or a firm, that operates within a regulated industry, where the FCA, or Financial Conduct Authority, is the regulatory body.)

As a reference point on the work they do, you can review the outcome of the case of Alsford Page & Gems which was delivered in April 2021. The FCA use this case to justify their efforts. Following the case, a powerful and pointed response from the FCA’s Executive Director of Enforcement and Market Oversight, Mark Steward should serve as a lesson for all firms:

“Principal firms have a responsibility to oversee their Appointed Representatives and ensure they are carrying out regulated activities properly. Without adequate oversight, customers are at risk and, as this case shows, where that is the case, the FCA will take action against the principal. APG’s oversight of its Appointed Representatives was inadequate and ineffective which created the risk that customers, including those who are vulnerable, might be sold products they did not really want, or which did not meet their needs.”

The FCA has said it is encountering more examples of misconduct, often stemming from Principals’ failure to oversee their Appointed Representatives appropriately. The FCA is undertaking work to address the harms occurring which includes greater scrutiny of firms as they appoint Appointed Representatives, a range of targeted supervision in high-risk sectors and considering whether rule changes may be required to reduce the harm posed by Appointed Representatives.

If you are a firm that has secondary intermediary ARs and/or ARs that don’t just do regulated activities, then it is likely that you are going to have to reach out to the ARs for some information to complete the survey the FCA has set up. Our advice is not leave this too late to meet the mid-December submission deadline.

If you need help, we have experts on hand to help. Call our team today and we can help you turn a potential liability into a real asset for your business. Email,  call 01604 709509 or visit our website.

About the author

Katherine is a member of the senior management team at RWA. She has over 20 years’ international experience working in HR, across various sectors, including financial services, insurance and regulated environments. Over the years, she has collaborated with some exceptionally talented HR professionals, with whom she has joined forces on special projects. Her network of HR professionals provides advice and training to companies and other HR teams.

In her role with RWA, Katherine heads up RWA’s Human Resources Consultancy and provides objective support to firms on employment law and HR issues. She uses her extensive skills and knowledge to work with firms to help them develop strong and resilient HR strategies and establish healthy organisational cultures.

Katherine holds a degree in Business Administration and Management from the University of Northampton and a Postgraduate Diploma in Human Resource Strategies from London Metropolitan University. She is a Fellow of the Chartered Institute of Personnel and Development (FCIPD).

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