Table of Contents
- Why Firms Move from Appointed Representative to Direct Authorisation
- Can You Move from Appointed Representative to Direct Without a New Application?
- Step 1: Assess Readiness and Plan Your Move
- Step 2: The FCA Authorisation Application Process Explained
- Step 3: FCA Regulatory Business Plan Requirements
- Step 4: Compliance Policy Review Checklist for 2026
- Common Mistakes to Avoid When Moving to Direct Authorisation
- How Long Does the Move Take and What Happens Next?
- Frequently Asked Questions
Last Updated: September 29, 2026
Why Firms Move from Appointed Representative to Direct Authorisation
Moving from appointed representative to direct authorisation is the process of ending your relationship with a principal firm and obtaining your own permissions from the regulator. It gives you full control over your business.
Firms make this move for clear reasons. You keep more of your revenue instead of sharing it. You decide which products to offer and which customers to serve. You build your own brand rather than operating under someone else’s.
The trade-off is real, though. Direct authorisation means you carry the full weight of regulatory responsibility yourself. Capital rules apply to you. Reporting duties fall on you. Complaints handling sits with you.
At FCA Authorisation, we’ve guided many firms through this transition. The ones who succeed plan carefully before they make the leap.
Many firms find that staying under a principal limits their growth. A common approach is to assess whether your revenue and client base can support the costs of going solo.
The move from appointed representative to direct authorisation is not just a paperwork exercise. It changes who is legally responsible for everything your firm does.
Can You Move from Appointed Representative to Direct Without a New Application?
No, you cannot move from appointed representative to direct authorisation without a fresh application. You must apply to the regulator for your own permissions.
There is no automatic transfer. Your existing status as an appointed representative ends when your principal relationship ends. From that point, you need your own authorisation to keep trading.
Some firms assume their track record under a principal counts as an application. It does not. The regulator assesses you as a new applicant, though your history can support your case.
The good news is that your experience as an appointed representative works in your favour. You already understand the regulatory landscape. You know how supervision works.
FCA authorisation application guidance sets out what new applicants must provide.
Step 1: Assess Readiness and Plan Your Move
Before you apply, work out whether you can meet the threshold conditions. These are the basic requirements every authorised firm must satisfy.
Ask yourself three questions:
- Can you fund the minimum capital your permission type requires?
- Do you have the right people in place, including a compliance function?
- Can you handle reporting, complaints and record-keeping on your own?
If the answer to any of these is no, fix it before you apply. A weak application wastes time and money.
Capital, Resources and the Threshold Conditions
Capital rules depend on what you plan to do. A firm giving advice needs less capital than one holding client money.
You also need the right people. The regulator expects a clear management structure. Someone must own compliance. Someone must own risk.
Many firms underestimate the cost of standing alone. You no longer share overheads with a principal. Systems, insurance and compliance support all become your responsibility.
Notifying Your Principal Firm and Managing the Exit
Your principal firm must know you plan to leave. Most contracts require notice. Check yours early.
The exit needs care. You must not leave clients in limbo. Agree a handover plan with your principal. Confirm who services existing clients until your authorisation comes through.
A common mistake is telling clients too soon. Wait until you have a clear timeline.
Step 2: The FCA Authorisation Application Process Explained
The FCA authorisation application process asks you to prove you meet the threshold conditions. You submit forms, supporting documents and a business plan through the regulator’s online system.
Expect the regulator to ask questions. This is normal. It does not mean your application is in trouble.
Submitting Your Application and Responding to FCA Queries
Submit a complete pack. Missing documents slow everything down.
When the regulator comes back with queries, answer fully and quickly. Vague answers invite more questions. Clear answers move you forward.
The FCA Authorisation team manages this back-and-forth for clients.
Step 3: FCA Regulatory Business Plan Requirements
Your business plan is the heart of the application. It must show how your firm will operate and stay compliant.
Cover these areas:
- What services you will offer and to whom
- How you will market them
- Your management and governance structure
- Your compliance and risk controls
- Financial forecasts for at least three years
- How you will handle client money, if relevant
The plan must match the permissions you request. If you ask for permissions you cannot support, expect questions.
FCA regulatory business plan expectations explains what the regulator looks for.
Step 4: Compliance Policy Review Checklist for 2026
A compliance policy review checklist for 2026 should cover every control the regulator expects you to have in place. Review each item before you submit.
- Financial crime controls, including anti-money laundering procedures
- Complaints handling process and record-keeping
- Training and competence records for all staff
- Conflicts of interest policy
- Outsourcing and third-party oversight
- Data protection and client record retention
- Senior manager responsibilities mapped and documented
Each policy needs an owner and a review date. Empty policies with no evidence of use will not convince anyone.
Common Mistakes to Avoid When Moving to Direct Authorisation
The biggest mistake is treating the move from appointed representative to direct authorisation as a form-filling task. It is a business change.
Other common errors:
- Underestimating capital and running costs
- Submitting a business plan that does not match the permissions requested
- Leaving the principal relationship without a client handover plan
- Assuming your appointed representative history removes the need to prove readiness
Rushing your exit from a principal firm before authorisation is granted can leave you unable to trade. Secure your approval first, then move.
How Long Does the Move Take and What Happens Next?
Timelines vary. A straightforward application can move quickly. One with complex permissions or incomplete answers takes longer.
Once approved, you must meet ongoing duties. Reporting, training and supervision do not stop at authorisation.
If you want the process handled end to end, FCA Authorisation offers bespoke application packs, fixed project costs and project management from start to finish. FCA ongoing supervision requirements explains what comes after approval.
Frequently Asked Questions
What are the primary benefits of moving from an Appointed Representative to directly authorised status?
Direct authorisation gives you control over your own permissions, product range and compliance arrangements. You can keep more of the revenue that previously went to your principal, launch products without waiting for approval, and build your own relationship with the FCA. Many firms also find it easier to attract investment and senior hires once they hold direct permissions, because the business is no longer dependent on another firm’s regulatory cover.
Does the FCA require a new application when moving from AR to direct authorisation?
Yes. Moving from appointed representative to direct is a new authorisation, not a variation of your existing status. You cannot simply amend your AR arrangement. You must submit a fresh application through the FCA’s Connect system, including your regulatory business plan, compliance arrangements and supporting documents. Expect the FCA to assess your firm against the same threshold conditions as any new applicant, so plan for a full application rather than a simple notification.
How long does the FCA authorisation process take for firms transitioning from AR status?
The FCA aims to determine most complete applications within six to twelve months, but timelines vary with the complexity of your permissions and the quality of your submission. Firms that file a complete pack, answer queries promptly and demonstrate ready compliance arrangements typically move faster. If the FCA requests more information, the clock pauses. Build in extra time before your planned launch date and keep your principal informed throughout.
What are the ongoing compliance obligations for directly authorised firms?
Directly authorised firms must meet the FCA’s ongoing requirements, including maintaining adequate financial resources, appointing Senior Management Functions, submitting regulatory returns on time and keeping policies current. The compliance policy review checklist for 2026 should cover your complaints handling, financial promotions, outsourcing, and training and competence arrangements. You also need to notify the FCA of any material changes, such as a change in control or a significant shift in your business model.
Leaving a principal firm is a big step, and the application process can feel heavy when you are running a business at the same time. FCA Authorisation has supported firms through this exact transition since 2000, with qualified consultants, bespoke application packs and fixed project costs. Our team manages the project from inception to completion, so you always know what happens next. Get started with FCA Authorisation and move to direct authorisation with confidence.