As the new year begins, Appointed Representatives (ARs), potential ARs and FCA-authorised consumer credit firms should take stock of the regulatory landscape and ensure they are prepared for heightened scrutiny and evolving expectations. The FCA has made it clear that consumer credit, and particularly those under the AR regime, remains a supervisory priority.
Increased FCA Focus on the AR Regime
The FCA continues to raise concerns about poor oversight within principal–AR relationships. Principal firms are expected to demonstrate robust due diligence before appointing ARs, ongoing monitoring of activities and clear accountability for customer outcomes. ARs, in turn, must fully understand the scope of their permissions, operate strictly within them and evidence compliance rather than relying on principals to “carry the risk”.
For potential ARs, the bar to entry is rising. Principals are increasingly selective, requiring stronger governance, competent senior management and a clear understanding of regulatory responsibilities before onboarding.
Consumer Duty Remains Central
The Consumer Duty is now firmly embedded and firms should expect the FCA to move from implementation to enforcement. ARs and credit firms must be able to demonstrate how their products, services, communications and customer support deliver good outcomes across the four Consumer Duty outcomes.
This includes reviewing financial promotions for fairness and clarity, ensuring fees and commissions provide fair value, and evidencing that vulnerable customers are identified and supported appropriately.
Data, Reporting and Regulatory Returns
Accurate and timely regulatory reporting continues to be an area of focus. Credit firms and principals must ensure AR data submitted via FCA Connect and RegData is complete and up to date. Poor quality data is increasingly viewed as an indicator of weak governance.
Firms should also prepare for ongoing changes to consumer credit reporting requirements and ensure internal systems can support accurate submissions.
Governance, Oversight and Culture
The FCA expects firms to move beyond “tick-box” compliance. Effective oversight includes documented monitoring plans, regular file reviews, meaningful MI and prompt action where issues are identified. ARs should expect greater challenge and engagement from their principals throughout the year. This is why we work with our ARs, ensuring they feel supported with their regulatory requirements and foster business growth and positive consumer outcomes.
Preparing for the Year Ahead
As regulatory expectations continue to rise, ARs and credit firms that invest in strong governance, clear accountability and proactive compliance will be best placed to succeed. Now is the time to review oversight frameworks, refresh training and ensure Consumer Duty evidence is robust, relevant and up to date.
A proactive approach in the early months of the year can significantly reduce regulatory risk and support sustainable growth in an increasingly demanding environment.
