The Financial Conduct Authority (FCA) expects principal firms to exercise effective oversight and supervision of their appointed representatives (ARs) to ensure compliance with regulatory requirements and prevent harm to consumers and markets. Key expectations include:
- Pre-Appointment Due Diligence – Principals must conduct thorough checks before appointing an AR, assessing its financial stability, business model, and the competence of its senior management.
- Ongoing Monitoring – Principals must regularly review their ARs’ activities, ensuring they remain compliant with FCA rules. This includes risk assessments, audits, and scrutiny of financial promotions.
- Clear Responsibilities & Controls – Principals must set out clear policies, training, and procedures for ARs, ensuring that they act within their scope of permissions.
- Data & Reporting – Principals must collect and analyse relevant data on their ARs’ performance and compliance, reporting key issues to the FCA when necessary.
- Intervention & Termination – Where issues arise, principals should take swift action to address concerns, which may include terminating the AR arrangement if necessary.
Effective controls and continuous adviser monitoring are at the core of our Network’s regulatory requirements. A dedicated Compliance department is essential to ensure the quality and performance of our Appointed Representatives (ARs), and these are obligations we are held to as your Principal firm.
Regular file reviews, grading, annual observations, and Fit & Proper assessments are not optional extras. They are the evidence of ongoing competence and good customer outcomes, and every adviser is expected to complete them within the timescales set, not when it is convenient.
The FCA also requires the Network to identify, address and report breaches promptly. This part of the process is rarely welcome, but it is not open to negotiation, and it is not something the Compliance team is able to set aside on request.
We want to be completely clear about what happens where the guidelines are not followed. The fees set out below are being applied, and they will continue to be applied consistently across the Network. The only reliable way to avoid them is to meet the requirements on time, every time.
These fees are as follows:
Where a fee has been applied, the underlying issue still needs to be resolved, paying it does not close the matter. If you are at risk of falling behind on any of the requirements above, speak to the Compliance team before a deadline passes rather than after it.
For any questions or queries, contact the Compliance Team. Call: 01708 676110 or Email: compliance@connectmortgages.co.uk
Best regards,
Shahrukh Malik
Compliance Director