The question of whether to become directly authorised (DA) or not remains a common one. And yet despite this, it’s still not easy to answer. As equally right as it is for some firms to remain part of a network, for others, becoming DA is the natural next step.
However, if you are considering becoming DA, it is vital that you do so with your eyes open regarding what you need to do and keep doing. What follows is a brief breakdown of some of the biggest and lesser-known hurdles and issues you will need to consider.
Putting You in the Driving Seat
For many, the biggest reason to become DA is the greater control it provides. Whilst some networks give you complete freedom, many do not, resulting in the search for greater control. Becoming directly authorised provides this, enabling you to develop your own business model and systems and therefore operate exactly the way you want. Some of the biggest freedoms you get from becoming DA include:
- Only selling the products/services you know are best for your clients
- Designing your own research processes & suitability reports
- Creating your own competency criteria, adviser assessments and T&C scheme
- Choosing your own compliance support partner & resources
Whilst becoming DA really does put you in the driving seat in terms of running your own business, gaining greater control also brings with it added responsibilities.
The Challenges of Going DA
Simply put, being directly authorised means you are directly responsible for your actions. Not only must you fully understand your regulatory responsibilities, but more importantly, be able to continually demonstrate your ability to fulfil them. If you don’t, you run the risk of fines, reputational damage, and loss of earnings. Some of the biggest issues for newly authorised firms include:
- Keeping up to date – Staying abreast of FCA communications, rules and requirements, and interpreting these into your policies & procedures
- Reporting data to the FCA – Including details of your systems, business continuity and emergency recovery procedures, as well as the twice yearly RMAR report for MiFID exempt firms
- Protecting your clients – Having an appropriate complaints procedure and process & ensuring clients are not disadvantaged due to poor service, systems, controls, advice or attitude to risk
The Long & Winding Road
The thought of reshaping your entire business structure can be daunting, especially if you have become used to the support of a network. If you are considering going down this route, get in touch and we will be happy to answer any questions you have. Email joinus@tenet.co.uk or call 0113 239 0011 (option 2).