Reviewed by Matthew Bartlett, Director · Last reviewed 9 July 2026
When you buy professional indemnity cover through a broker, that broker holds one of two positions on the FCA Register. Directly authorised means the broker holds its own FCA authorisation and is directly answerable to the regulator for its conduct. Appointed Representative — AR for short — means the broker operates under the authorisation of another firm, called the Principal, and the Principal is legally responsible for the AR's conduct under FSMA 2000 s.39. Both routes are entirely legal and both are common across the UK broker market. The difference matters for who you are actually engaging with when you place your cover, who supervises your broker's conduct, and where any complaint or claim against the broker sits. This guide explains the categories, shows you how to check them yourself on the FCA Register at register.fca.org.uk, and sets out what the distinction means in practice for a professional buyer.
The Financial Conduct Authority maintains a public register at register.fca.org.uk of every firm authorised to conduct regulated activity in the United Kingdom. Each firm entry shows the firm name, its firm reference number (FRN), its status (Authorised, Registered, or Exempt), the regulated activities it is permitted to carry on (insurance distribution, credit broking, mortgage mediation, and so on), any trading names in use, the principal place of business, and — where the firm operates as an AR — the Principal it acts under. The Register is public, free to search, and updated in near real time from firm notifications and FCA supervisory action. A search takes under a minute and is the single most useful due diligence step a professional buyer can take before instructing any broker.
A directly authorised firm holds its own permission under FSMA 2000 s.31. It has been through the FCA authorisation process end-to-end — it submitted its own business plan, its own capital position, its own controllers and senior manager appointments, and it holds its own regulated permissions in its own name. It is directly answerable to the FCA for its conduct. The FCA Handbook rules — including COBS, ICOBS, PRIN, DISP, and MIPRU — apply to it directly. It pays its own regulatory fees, its own FSCS levy, and its own FOS levy. When a directly authorised firm loses its authorisation, it loses its ability to trade in that regulated activity. When it is sanctioned, the sanction sits on its own FRN and remains publicly visible on the Register. When a customer complains, the complaint is investigated within the firm's own DISP framework and the firm bears the outcome directly.
An Appointed Representative is a firm that is not itself directly authorised but has entered into a written contract — the AR contract — with a directly authorised firm, the Principal, which takes responsibility for the AR's regulated activity under FSMA 2000 s.39. The Principal is required to supervise the AR, to ensure the AR's compliance with the FCA Handbook, to indemnify the AR's conduct where relevant, and to bear the regulatory risk. The AR itself does not hold FCA permissions in its own right — its ability to conduct regulated business flows from the Principal's permissions and the contract between them. When you deal with an AR, you are contracting with the AR firm and paying the AR firm — but from the regulator's perspective the Principal is responsible for what the AR does under the AR agreement.
Go to register.fca.org.uk. Type the broker's firm name into the search box, or the FRN if you already have it. On the result page look for the "Status" line near the top. If the status reads "Authorised" and the firm has its own permitted activities listed underneath, the firm is directly authorised. If the status reads "Appointed Representative" and lists a Principal firm name — usually with a link — the firm is an AR of that Principal. The Principal's FRN is linked from the same page. Click through and you can see the Principal's own status, its own permissions, its own principal address, and any regulatory history the FCA has published. A single search tells you everything you need to know about which regulatory route your broker operates under.
Six specific things a professional buying PI cover may want to consider.
Who supervises your broker's conduct. For a directly authorised firm, the FCA supervises the firm directly. For an AR, the FCA supervises the Principal, and the Principal supervises the AR. The regulatory chain is one link longer with an AR. That is not automatically a weakness — a well-run Principal running a mature AR programme can supervise its ARs more closely than the FCA can supervise a small directly authorised firm — but the chain is different, and that is worth knowing.
Who investigates a complaint against your broker. DISP applies uniformly to both routes, but the operational reality differs. An AR typically handles first-line complaint contact itself, under the Principal's DISP framework and often within the Principal's complaint-handling system. Final response letters may go out under the AR's name, the Principal's name, or both, depending on the arrangement. Where a directly authorised firm handles a complaint, the DISP process sits entirely inside that firm.
Continuity if the AR loses its Principal. An AR contract can be terminated by either side. If the Principal terminates the appointment — for commercial reasons, a change of strategy, or a supervisory concern — the AR must find another Principal, become directly authorised in its own right, or stop conducting regulated activity in the affected class. FCA rules require Principals to notify the regulator of AR terminations. If your broker were to lose its Principal mid-policy, your cover with the insurer is not affected — your policy sits with the insurer, not the broker — but the broker relationship itself may need to move.
Financial resilience. An AR's own balance sheet does not have to meet FCA capital adequacy rules — the Principal's does. MIPRU 4.4 minimum capital for insurance intermediaries applies at the Principal level. Some ARs are extremely well capitalised firms in their own right; some are small operations relying entirely on the Principal's resilience. Neither position is inherently better or worse, but the location of the capital adequacy test differs.
Complaint handling and FOS access. This is the same either way. Eligible complainants can refer an unresolved complaint to the Financial Ombudsman Service regardless of whether the broker they dealt with is directly authorised or an AR. DISP 1 and DISP 2 apply uniformly. The FOS award limits and referral windows do not change based on the broker's regulatory route.
Direct responsibility for advice and arrangement. When an AR advises on and arranges your PI cover, the regulator holds the Principal responsible for the compliance of that advice and arrangement. Contractually, you have engaged the AR. In a regulatory sense, the Principal bears the buck. Where a directly authorised firm advises and arranges, contractual and regulatory responsibility sit in the same place.
An AR is not a lesser broker. Many specialist brokers operate as ARs of larger networks because the AR model gives them access to a Principal's compliance infrastructure — Handbook interpretation, financial promotion sign-off, regulatory reporting, senior manager oversight — without duplicating the cost of running that infrastructure in-house. A significant portion of the UK broker market is made up of ARs, including specialist firms with deep expertise in narrow classes. Equally, a directly authorised firm is not automatically a stronger broker — smaller directly authorised firms often carry more concentrated regulatory risk than well-run ARs of well-run Principals, because a small firm has to shoulder the entire compliance function itself.
The difference between the two routes is factual. What you do with the information is a matter for you. The point of checking the Register is not to reject one route in favour of the other — it is to know which route you are dealing with, so you can ask the right questions of the broker in front of you.
Several other data points on a firm's Register entry are worth reading before you instruct any broker. The firm reference number itself and the date the firm was first authorised — a long unbroken authorisation history is easier to reconcile than a short one. The permitted activities — for a broker arranging PI cover you would expect to see "insurance distribution" listed under the permissions. Any trading names — some brokers trade under different names to different sectors, and the trading name may be the one you have been quoted under while the FRN sits with the parent firm. Publicly noted complaints information where it is made available. Any past enforcement action — the FCA publishes final notices, decisions, and public censures against firms where regulatory action has been taken. All of this sits in the same free public search.
Apex Insurance Brokers Limited holds FCA firm reference number 724952. Directly authorised — Apex holds its own permission under FSMA 2000 s.31 and is answerable to the FCA directly for its conduct. You can verify at register.fca.org.uk. Named broker on every account, MIPRU 3 compliant, professional indemnity cover held at the firm level. Our retention across the book is 95% year on year, measured on client count at renewal.
Talk to a directly authorised specialist
Ready to talk PI cover with a broker that is directly authorised? A named broker at Apex will read your submission and come back within one working day.