Why become an Appointed Representative?

The principal is entirely responsible for ensuring your compliance with all the FCA’s rules, including FCA fees and contributions to the FSCS. Compliance in line with FCA rules and best practice is essential to your ability to do business, thus the principal’s role is fundamental. There are many advantages to becoming an AR, such as: 

FCA Authorisation

Your principal is required to take full responsibility for your authorisation by the FCA and makes that application on your behalf;

As the principal is typically well-established in the insurance industry, FCA authorisation for AR’s are typically secured quickly (4-6 weeks) compared to an application made for direct authorisation (10-12 months from concept to authorisation).

The cost of making an application for direct authorisation (a fee of £1,500, £5,000 or £25,000, depending on the complexity of your business, plus the requirement of a thorough Compliance Framework, professional indemnity insurance, audited accounts, regulatory compliant suite of documents, AML/Sanctions Checking tools and paid up share capital to meet any solvency margins) is borne by the principal/firm seeking direct approval – all of which can be a costly exercise in set up and annual fees. 

Support

The principal is generally responsible for all compliance and regulatory support that your insurance business may require;

As an AR, you have access to specialist advice and expertise which often may make the difference between winning and losing clients in the insurance business; 

Ownership

You may be concerned that ownership somehow involves the loss of your own brokerage’s identity and ownership. With xBroking this is never the case. The brokerage and clients are always yours, even after the end of the agreement. xBroking would never contact your client without your consent. 

Systems

Systems capable of matching products to customers’ requirements is essential – but none more so in your role as an insurance broker where the depth of products and the speed with which transactions need to be conducted are paramount. xBroking utilise Acturis for our preferred system, where the AR has direct access to the principal’s IT systems and letter templates, ensuring that you maximise your potential by executing a high quality service tailored to your customers’ precise needs and requirements;

Products

Thanks to the functional scope, depth and accreditations of the principal’s business, the AR would have access to a much broader range of insurance products, higher commission levels (through critical mass of the principle) and insurer agencies than the one or two typically available to a directly authorised insurance broker;