The FCA earlier this week announced new rules for Appointed Representatives as part of their new 3-year strategy to improve customer outcomes in the financial services market. The new rules will place more onus on Principal firms to monitor their Appointed Representatives (AR) and will enhance the application process for appointing an AR.

The retail motor industry widely uses Appointed Representative arrangements to help streamline and reduce the cost of regulatory compliance for finance and insurance. The arrangements allow some motor dealers to take advantage of 3rd party firms' FCA authorisation and operate under their network rather than be directly authorised by the FCA. Some dealer groups also use the arrangement to rationalise internally their FCA authorisation to enable better controls within their businesses and also allow them to more quickly access authorisation status for new dealerships.

Although we support the FCA’s desire to improve consumer outcomes we are concerned that the new rules are likely to increase the regulatory burden on dealers and may force some to need to apply for full FCA authorisation with its consequential increase in regulatory costs that in turn will increase the cost of vehicles to consumers. The new rules are also likely to slow down the authorisation process as the FCA has to give authority to new ARs to be appointed.

“With the unprecedented burden currently facing dealers across the country, further regulatory responsibility will negatively impact their business. During a cost-of-living crisis, the additional costs of these measures will lead to a strain on tight budgets and ultimately lead to an increased cost for consumers”. said Sue Robinson, the chief executive of the NFDA.



Annaluce Cavalmoretti
NFDA Communications Assistant

Direct: +44 (0) 0207 307 3410

Mobile: +44 (0) 07384514978