Do you want to become an appointed representative? Do you know what it means for your business or whether it is a good idea for your company? Deciding to become an appointment representative has its benefits but it is important to understand the process before making any final decisions.
What is an Appointed Representative?
An appointed representative is an individual or it can also be a firm which is allowed to undertake the sale of general insurance business, without direct Financial Services Authority authorisation. The company or individual is required to work with a Principal directly authorised by the Financial Services Authority.
What is the benefit of becoming an Appointed Representative?
The main advantages of the decision to become an appointed representative are time and money. The FSA authorisation process takes six months as a minimum. On top of that there is the requirement of creating a structured business plan, find agencies, put strategies in place and more. The whole process can in fact end up as many as 12 months or even more.
Furthermore, another key advantage of becoming an appointed representative is that you have protection of a principal. The principal takes on the full responsibility of ensuring your business’ compliance with Financial Services Authority regulations.
How to Became an Appointed Representative
To become an appointed representative, you need to:
- Decide which regulated activities (listed on the FCA website) and find a principal which works in that business area.
- Choose between becoming an appointed representative or what is known as an introducer appointed representative. There are fewer rules involved in an introducer appointed representative but the responsibilities are the same.
- Decide how many principals you want. This will usually depend on your business type and also the type of customers you have.
- Find out the contractors you need to put in place.
- Ensure your principals inform the FCA of your appointment so it is added to the register.
The process is relatively straightforward and there are real benefits to it. It is something you should consider at any stage in your business’ development. It is especially relevant to businesses looking to reach their next growth level.
