Directly authorised vs Appointed Representative — UK 2026
The distinction between a directly-authorised broker and an Appointed Representative is one most clients never think about — until something goes wrong and it becomes the most consequential piece of due diligence they didn't do. Post-PS22/11, the FCA has materially tightened principal-firm oversight of ARs. This page explains what the two status types mean, why they matter, and how to check which route your broker operates.
The two authorisation statuses
Directly authorised
The firm holds its own FCA authorisation. Every director, compliance officer, and senior manager is directly accountable to the FCA. The firm passes its own Threshold Conditions, its own Financial Requirements, its own SMCR obligations. The firm's FCA Firm Reference Number (FRN) is registered in its own right.
Apex Insurance Brokers Limited is directly authorised. FRN 724952. Full director-level accountability, not delegated.
Appointed Representative
The firm operates under the authorisation of another FCA-authorised firm (the ‘principal firm’). The AR carries out regulated activity but the FCA-authorisation belongs to the principal. Regulatory accountability flows through the principal.
The AR route is common among smaller brokers who don't want or can't sustain the compliance burden of direct authorisation.
What PS22/11 changed
The FCA's PS22/11 policy statement (in force December 2022) materially reshaped the AR regime. Key changes:
- Enhanced principal-firm oversight. Principal firms must actively supervise their ARs' regulated activities.
- Annual self-assessment. Principals must complete an annual self-assessment of AR arrangements.
- New reporting requirements. More granular reporting on AR activity and complaint volumes.
- Financial-strength requirements. Principals must have adequate financial resources to support their AR book.
The FCA has been actively enforcing these requirements. Several principal firms have faced supervisory action for inadequate AR oversight. In extreme cases, principal firms have terminated AR relationships mid-year, leaving ARs scrambling for alternative authorisation.
Why the distinction matters for you as a client
- Accountability. Directly-authorised broker takes ownership. AR broker's accountability sits partly with the principal.
- Continuity risk. AR relationships can be terminated. Your broker's authorisation can lapse mid-year if the principal firm restructures.
- Advice consistency. Directly-authorised firms set their own advice standards. ARs operate to their principal's standards, which may not be optimised for your specific class.
- FCA supervisory attention. The FCA regulates directly-authorised firms directly. It regulates ARs through their principals. Direct supervision typically means faster response to issues.
- Complaint-handling. DISP complaint route is direct to the firm for directly-authorised. For ARs, it may route through the principal.
How to check your broker's status
- Ask directly. ‘Are you FCA-directly-authorised or an Appointed Representative?’
- Check the FCA Register. Search the firm name at register.fca.org.uk. Directly-authorised firms have their own listing; ARs show as ‘Appointed Representative of...’
- Check the Firm Reference Number. FRN belongs to the firm holding authorisation. If it's the principal firm's FRN, the broker is an AR.
- Ask about the principal firm. For ARs, understand who the principal is and what the arrangement covers.