Across 2025, the FCA continues to sharpen its focus on appointed representative (AR) firms, particularly those in credit broking and credit hire sectors. These developments place a spotlight on strengthened oversight and more robust compliance practices.
1. Sharper Oversight Through AR Regime Reforms
Since 8 December 2022, the FCA has introduced enhanced rules requiring principal firms to exercise heightened oversight over their ARs. This includes:
- Ensuring ARs have adequate systems, controls and resources.
- Regular, annual reviews of ARs’ activities, management and suitability.
- Mandatory pre-notification of new AR appointments to the FCA.
- Principal firms must submit data on complaints and revenue data for each of their ARs.
A 2024 FCA review of principals managing credit broking demonstrated mixed practices in initial onboarding, ongoing monitoring, and ending AR relationships highlighting areas for improvement.
2. Data-Driven Risk Monitoring & AR Market Trends
FCA data as of February 2025 shows around 2,571 principal firms overseeing roughly 33,830 ARs, with a growing proportion engaged in consumer finance.
While the AR regime enables market access and distribution, supervisory data reveals higher conduct and complaints levels among ARs compared to directly authorised firms often tied to weak principal oversight.
3. Regulatory Action & Market Contraction
The regulator’s enforcement stance is active: in mid-2023, the FCA acted against ten firms for inadequate AR oversight. Meanwhile, annual figures show a sustained decline in AR numbers from around 43,000 in 2020 to around 35,000 by 2023 reflecting tighter regulatory standards.
4. Consumer Duty: A Growing Compliance Imperative
The FCA has underscored that the AR regime reforms go “hand-in-hand” with implementing the Consumer Duty mandating firms, including ARs and their principals, to deliver consumer-centric outcomes.
What AR Firms Should Be Doing Now
Principal Oversight
Ensure your principal engages in rigorous due diligence, supports Consumer Duty compliance, and submits accurate data.
Prepare for Data Reporting
Track your revenues and complaints diligently—your principal is responsible for annual submissions.
Monitor Regulatory Landscape
Stay alert to FCA reviews and practices for Credit Broking ARs. Be proactive if your principal is targeted.
Align with Consumer Duty
Ensure your processes, communications, and products put consumer outcomes at the forefront. Understand how your principal enforces this.
The evolving frameworks underscore that being an AR still carries serious responsibility for compliance and consumer protection. Staying informed and aligned with your Principal’s strategies is more essential than ever.
We work with our ARs to achieve the right outcomes for them and their customers.
