If you’re a principal firm for an appointed representative (AR), find out what your responsibilities are and when to notify us.
On this page
An AR carries on regulated activity under the responsibility of an authorised firm, known as 'the principal'.
The principal is responsible for making sure the AR is fit and proper and complies with our rules. This page helps principal firms understand our expectations.
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As a principal firm, you must:
- have a written agreement with the AR, setting out what business they can do
- assess an AR before appointing them to ensure they're fit and proper, financially stable and suitable to carry out business for your firm
- notify us when you appoint new ARs at least 30 days before the appointment takes effect
- review information on ARs’ activities, business and senior management regularly
- ensure data on ARs is up to date and notify us of any changes
- take reasonable steps to ensure ARs act within the scope of their appointment
- ensure at all times that your firm has the skills and resources to oversee your AR, including if an AR's business changes or expands
- provide complaints data and revenue information for ARs on an annual basis
- be clear on when and how to terminate an AR relationship
- ensure an AR continues to meet the necessary standards (such as the Consumer Duty). This applies to the regulated activities carried on by the AR for which you’ve accepted responsibility.
- have adequate financial resources taking into account the activities of your ARs (including Introducer Appointed Representatives)
- hold compliant Professional Indemnity Insurance to cover the activities of your current and former ARs (including Introducer Appointed Representatives) where required to do so by our rules
How to oversee your ARs
You need to be responsible for your ARs on an ongoing basis, and apply an appropriate level of oversight and monitoring to them:
- assess senior management at your AR(s) for for fitness and propriety, which includes competence and capability
- if you delegate functions or tasks to an AR, put safeguards in place – this includes identifying conflicts of interest and implementing enhanced monitoring
- regularly assess whether your controls and resources are adequate
- if they're not, notify us while you take steps to address; you might need to postpone or terminate AR appointments
- things to look out for include if an AR's business grows significantly, a high staff turnover or number of complaints, or where an AR's target market or scope of appointment changes
- monitor and assess the risk of harm to consumers and market integrity
- oversee ARs to the same standard as your employees
- be able to show that you're monitoring your AR and the business risks they present, for example by:
- looking at key performance indicators – discussing these means you can spot trends and take action
- reviewing the quality of advice given to customers
- considering training and development needs
- reviewing their financial position
You'll also need to do an annual review of your ARs, prepare an annual self-assessment and understand how to terminate an AR when necessary. Please follow our guidance below, and refer to our Handbook for more detail.