Improving Oversight of Appointed Representatives

One of the commitments under the FCA’s CEO Nikhil Rathi’s 3-year strategy is “Improving oversight of Appointed Representatives”.

This comes under the FCA’s focus on “Reducing and Preventing Serious Harm”.

The FCA recently published the results of a review of 250 principal firms that it conducted earlier in the year, with the headline being “Oversight of ARs improving but more to do”.

The review found some firms took a tick-box approach to compliance, relied on basic information like website checks, or used self-declarations from their ARs to demonstrate effective oversight.

Surprisingly, 1 in 5 principals had not carried out a required self-assessment or annual review of their ARs.
And whilst ITC was not involved in this work, it compares favourably with the findings.

Good practice points
In addition to actioning the more straightforward items, ITC already has embedded within its business the good practice points raised in the review, such as:

•    using a range of management information to assess the risk of harm to consumers or markets, such as quality assurance checks on client files, in-person visits to ARs,
•    having regard to Consumer Duty obligations when carrying out annual reviews, such as considering fair value assessments and providing training for staff,
•    having a strong understanding of ARs’ business models,
•    analysing monthly activity comparing the activity report the AR submits with the principal’s own data,
•    reviewing new financial promotions before publication to ensure compliance.

Be confident with ITC
Whilst regulation is constantly evolving such as with the Consumer Duty, with ITC you can be confident that you are partnered with a principal firm that takes its and your FCA compliance obligations extremely seriously.