The principal accepts responsibility for the regulated activities included within the appointed representative agreement. In return, the adviser must operate within the principal’s permissions, systems, controls and supervision.

For mortgage advisers, the practical question is therefore not only whether to join a network. It is whether the network’s permissions, oversight and operating model fit the business they intend to build.

At a Glance

An Appointed Representative, known as an AR, carries out agreed regulated activities under the responsibility of an FCA-authorised principal firm.

Before an adviser can begin trading, the principal will normally assess:

• Qualifications and relevant experience
• Fitness and propriety
• Financial standing
• Proposed regulated activities
• Business ownership and structure
• Compliance and conduct history
• Systems, controls and business plans
• Training or supervision requirements

The written agreement should then define the adviser’s permitted activities, responsibilities, fees and oversight arrangements.

What Does Becoming an Appointed Representative Mean?

An AR is not directly authorised by the Financial Conduct Authority.

Instead, the AR undertakes specific regulated activities under the responsibility of an authorised principal. The principal must have the correct permissions for the business the AR intends to conduct.

The agreement may cover areas such as regulated mortgage advice, protection or general insurance. However, permissions should never be assumed. They must be confirmed before the adviser begins conducting business.

The FCA’s guidance on becoming an appointed representative explains the regulatory relationship between an AR and its principal.

AR, IAR or Direct Authorisation?

The correct route depends on the activities the business plans to carry out.

Appointed Representative

An AR may conduct the regulated activities agreed with its principal. The principal provides oversight and accepts regulatory responsibility for those activities.

Introducer Appointed Representative

An Introducer Appointed Representative has a more limited role. An IAR may undertake permitted introductions and certain financial promotion activities but cannot provide regulated mortgage advice.

Directly Authorised Firm

A directly authorised firm holds its own FCA permissions. It carries direct responsibility for regulatory reporting, governance, professional indemnity insurance, systems and compliance controls.

Neither route removes responsibility. It changes where regulatory responsibility sits and how the business is supervised.

The Appointed Representative Application Process

1. Define Your Intended Business

The application should begin with a clear description of the services the firm intends to provide.

This may include:

• Residential mortgage advice
• Buy-to-let finance
• Commercial mortgages
• Bridging finance
• Second charge mortgages
• Protection
• General insurance

Some activities or products may fall outside FCA regulation. The principal should confirm the position and explain which activities are covered by the AR agreement.

2. Confirm the Principal’s Permissions

A principal can only accept responsibility for activities that fall within its own regulatory permissions.

Advisers should therefore compare their proposed business with the principal’s permissions, lender access and compliance framework. A broad lender panel has limited value when the required activity is outside the written agreement.

You can review the wider structure of the Connect Network before considering whether its proposition fits your business.

3. Complete Due Diligence

The principal must assess whether the proposed AR is suitable to appoint and supervise.

Checks may cover:

• Identity and ownership
• Employment and regulatory history
• Qualifications and competence
• Credit and financial standing
• Criminal or disciplinary matters
• Complaints history
• Previous network relationships
• Business forecasts and funding
• Conflicts of interest
• Data protection arrangements

Established firms may also need to provide company accounts, organisational charts and information about employed or self-employed advisers.

4. Agree the Scope of Appointment

The written AR agreement should clearly state what the adviser can and cannot do.

It should also explain:

• Compliance responsibilities
• File-checking requirements
• Supervision levels
• Adviser charging arrangements
• Network fees and commission splits
• Professional indemnity arrangements
• Marketing approval procedures
• Data and record ownership
• Termination provisions
• Client servicing responsibilities

The lowest fee is not always the lowest operational cost. Restricted permissions, weak case support or unsuitable systems may create greater costs later.

5. Complete Training and System Setup

Before trading begins, advisers may need to complete induction, compliance training and system testing.

This can include:

• Advice and suitability standards
• Consumer Duty requirements
• Financial promotion procedures
• Anti-money laundering controls
• Vulnerable customer processes
• Complaints handling
• Data protection
• Sourcing and customer management systems
• File submission and checking procedures

Training should reflect the adviser’s experience, proposed activities and supervision level.

6. Complete Regulatory Notification

The principal is responsible for making the required FCA notification concerning the appointment.

An adviser should not conduct regulated business until the principal confirms that every required step has been completed and trading may begin.

The timescale can vary. Delays commonly arise when information is incomplete, regulatory history requires further review or additional training is needed.

What Support Should an AR Network Provide?

Regulatory oversight is central, but the operating model also matters.

A mortgage network may provide:

• Compliance supervision and file reviews
• Lender and provider access
• Mortgage sourcing and CRM systems
• Training and continuing professional development
• Technical case support
• Business development guidance
• Marketing review and financial promotion approval
• Support for recruiting additional advisers
• Help with complaints and regulatory reporting

Connect Network ARs may also receive a profile within the Connect Experts mortgage adviser directory. This gives consumers a way to search for advisers by location, language, mortgage need and other practical preferences.

The directory supports visibility. It does not replace the adviser’s responsibility to provide suitable, compliant advice.

Questions to Ask Before Joining a Principal

Before signing an agreement, ask:

• Which regulated activities will my agreement cover?
• Which products or services are excluded?
• How are files checked before and after submission?
• Which systems are compulsory?
• How are financial promotions approved?
• What are the full fees and commission arrangements?
• What support is available for specialist cases?
• Can I retain my own trading name?
• How will my clients be handled if the agreement ends?
• Can the network support additional advisers as my firm grows?

The quality of an AR relationship is often determined by the clarity of these answers.

Becoming an Appointed Representative with Connect

Connect Network supports mortgage and protection advisers through a structured application and onboarding process.

The review considers the proposed business model, experience, permissions, training needs and compliance requirements. Approved advisers can then access the systems and support agreed within their appointment.

Read more about AR onboarding with Connect or review how to join Connect Network.

Take the Next Step

Becoming an Appointed Representative should begin with a technical assessment rather than a sales promise.

The right principal should understand the business you intend to conduct, define the permissions clearly and demonstrate how its supervision will work in practice.

Speak with Connect about becoming an Appointed Representative.