When working with or applying to be an Introducer Appointed Representatives (IARs), it’s essential to understand the limits of what they are legally allowed to do under Financial Conduct Authority (FCA) rules. An IAR is not the same as a full Appointed Representative (AR), and failing to respect those differences can create compliance risks for your firm.

What an IAR Can Do

An IAR’s role is very narrow and focused. They are allowed to:

• Effect Introductions
  This means they can collect a potential customer’s contact details and pass them to the Principal (usually a broker or lender) or part of their group. The IAR’s job is to introduce, not to advise, sell, or complete a transaction.

⚠️ Going beyond this (e.g. recommending products or negotiating terms) could be considered unauthorised regulated activity and expose both the IAR and Principal to FCA enforcement action.

• Distribute Financial Promotions
  This means they may share approved marketing materials (financial promotions) created by and branded as the Principal. They cannot create or alter financial promotions themselves; they can only share content that has already been approved for use.

In short, an IAR can open the door to a conversation, but cannot walk the customer through it.

What an IAR Cannot Do

IARs cannot:

• Advise customers or explain product details in a way that might be considered a recommendation
• Negotiate terms or handle any part of the transaction
• Collect payments or process claims
• Maintain an ongoing customer relationship on behalf of the principal

If you do anything beyond introductions and promotion distribution, then you risk carrying out regulated activities without authorisation, which is a serious FCA breach and risk facing the FCA’s consequences.

How This Differs from an AR

An Appointed Representative (AR) can do far more, provided the Principal has the relevant FCA permissions and has allowed them contractually.

It mirrors being directly authorised by the FCA

An AR can:

• Obtain and process customer details
• Market and sell products directly to customers
• Deal with customer service issues, claims, cancellations, and renewals
• Maintain the full end-to-end customer relationship

In effect, the AR is an extension of the principal’s business, operating under its umbrella (regulatory permissions and supervision).

Why These Distinctions Matter

Understanding the limitations is crucial because:

• Compliance Risk: Allowing an IAR to overstep their authority could be considered unauthorised regulated activity, potentially leading to FCA enforcement action.
• Operational Clarity: Your internal teams and partners need to know exactly who can do what to avoid confusion and liability.

If you have any further questions or concerns, contact our team and we will support you the best we can.

Call: 01792 926 060

Email: sales@thecomplianceguys.co.uk