Bob's Blog

Changing regulatory permissions can be the making of your business

14 May 2019

Whether you’re an appointed representative (AR) or directly authorised (DA) firm, moving to the other side of the fence is always going to be a big decision and one that might appear to be more trouble than it’s worth.

However, if it’s right for your firm then you should not feel held back by making that move.

We can only really talk about moving from an AR to DA status but one thing we try to stress is that, while it may seem a lot to overcome, there is a methodical approach that can be undertaken which will get you to your end point, hopefully without too much stress.

Not right for everyone

First of all, I think it’s important to stress that being a DA is not right for every firm.

Thousands of AR firms can’t be wrong, and for these firms being under the umbrella of a principal and accessing the services and products many networks can provide, is undoubtedly the right set-up for them.

However, there is also a group of firms – either currently ARs or new to the market and looking to secure their status – for whom being a DA is absolutely the right choice and they will be able to get the most out of their business by going down this regulatory route.

Some, for example, get to a point where they simply outgrow their network and change begins to seem almost inevitable for this group.

At the first of our DA transition workshops one of the comments most often heard was around how the whole process had been demystified and that, what they thought might be insurmountable obstacles to overcome, were nothing of the kind.

Have a plan

But, it’s also true to say that you cannot become a DA without a plan.

Firms have to understand the expectations upon them when they move to this status.

They have to understand the initial and outgoing costs which are involved – a point where there is a large amount of confusion and misinformation.

They have to understand where they might need support, for example in compliance, and rather importantly, they have to understand the right time to make such a move.

That last point is crucial because it will take preparation and planning, and owners will need to know the right time to switch, and how they might mitigate the risks and minimise any potential disruption.

After all, while there is a lot of support available to new DA firms, there are still immediate responsibilities, systems and processes that will need to be in place from day one.

The making of your business

What we do want to urge firms, who are right for DA status, is that they should not be frightened by the work involved or feel it’s somehow beyond them.

Many of those firms we spoke to at our event said it had acted as a catalyst for them to begin their status-change journey, and sometimes you just need to feel confident that you understand the requirements and you’re able to make it happen and work.

For many firms, this is not a problem at all.

That type of change can be the making of your business and, we should all be aware, that it’s never too late to start the rest of your business life.

Seek the information and support that is readily available and feel confident in the decisions you make, whether AR or DA.

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