22 Apr FCA Publication: Inactive Appointed Representatives or IAR’s
The FCA issued a publication yesterday and if you have Appointed representatives, or Introducer Appointed Representatives then this is relevant
They have indicated Good Practice and areas for improvement
Which they have identified as part of their supervisory work related to inactive appointed representatives – see below
FCA review: inactive appointed representatives
The FCA has published a review on the risks linked to appointed representatives who are not carrying out regulated activity.
The key message is that principal firms must maintain effective oversight, keep clear records, and act promptly where an AR or IAR is inactive or no longer appropriate to remain in the network.
The FCA expects firms to understand why an AR is inactive, monitor activity closely, and ensure regulatory returns are accurate and up to date.
It also highlights the risk of consumer harm where inactive ARs remain visible on the register and could create a misleading impression of regulatory protection
Principal firms should review their AR and IAR arrangements, strengthen monitoring where needed, and take timely action if relationships are not working as intended.
A reminder…
Good practice for AR oversight from FCA
The FCA’s good practice for principal firms overseeing Appointed Representatives is to use active, evidence-based monitoring rather than relying on basic checks or self-certification alone.
Key good practices include:
- Keeping clear written records of oversight activity, reviews, and self-assessments, signed off by the Board/equivalent.
- Using a range of management information, such as file reviews, customer complaints, revenue trends, website checks, customer surveys, in-person visits, and some may mystery shop
- Regularly review your AR agreements, business activities, and senior management changes, and making sure the AR remains within scope.
- Ensure formal onboarding, due diligence, training, and ongoing monitoring that considers Consumer Duty and the risk of consumer harm.
- Acting promptly where issues are identified.
The FCA also said poor practice includes a tick-box approach, over-reliance on website checks or AR self-declarations, and weak board-level oversight
If you have any questions, please do not hesitate to contact Create Solutions, email matt@createsolutions.co.uk or call the office on 0161 870 6637
Document in your management meeting/board meeting that you have reviewed the enclosed and action taken (where relevant)
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