HM Treasury Consultation on The Appointed Representatives Regime - Which? Response

Which? welcomes the opportunity to respond to HM Treasury’s consultation on the Appointed Representatives (AR) regime. Which? supports the government's direction of travel and is encouraged by HM Treasury’s commitment to improving the AR regime so that it can better protect consumers. Strengthening the accountability of principal firms overseeing ARs is essential to meeting the FCA’s Consumer Duty requirement to prevent foreseeable harm and to ensure consumers receive consistent protection regardless of how financial services are distributed. 

Summary 

• The introduction of a regulatory gateway that requires authorised firms to gain permission from the Financial Conduct Authority (FCA) prior to acting as principals over ARs is an important and necessary reform to address well evidenced harms. 
• Which? supports the extension of the Financial Ombudsman Service (FOS) jurisdiction to AR-related complaints where a principal firm is not responsible in order to close the current redress gap. 
• Which? supports bringing all ARs within scope of the Senior Managers & Certification Regime (SM&CR) to ensure individual accountability is consistent across the industry.  
• Which? supports moving detailed requirements into the FCA Handbook, provided core statutory protections are anchored in primary legislation. 
• Which? is concerned about granting automatic deemed permission to all existing principal firms given the evidence of widespread harm and historic misconduct within some AR networks.