Appointed Representatives: The rewards of a Regulatory Umbrella

As a start up business or Fintech entering financial services obtaining a direct FCA authorisation can be a rigorous and lengthy process. An increasing number of firms are finding it worthwhile to join a regulatory umbrella as an Appointed Representative. This process can allow a quicker route to market for many financial activities, including dealing in investments, the provision of investment advice or the management of assets. The Principal firm will manage the regulatory reporting and the compliance processes for their appointed representative and help get a firm up and running quickly and often a reduced cost.

An appointed representative within the FCA system is equivalent to a tied agent under MiFiD

What about direct authorisation with the regulator?

An appointed representative agreement is often a stepping stone to direct authorisation by the FCA. A direct application can often be more expensive and complex than joining an existing advice network or regulatory umbrella. Moreover, applying for direct FCA authorisation comes with a lack of control over timeframes which can lead to difficulty planning when dealing with low budgets or stringent time constraints. Regulatory compliance is becoming increasingly complex, but using a regulatory umbrella can help ease out some, but by no means all, of the regulatory burdens.