Alistair Body writes…
When evaluating potential Appointed Representative (AR) networks, prospective ARs should ask critical questions of their potential Principal to ensure the network aligns with their business goals and provides the necessary support to ensure their success.
I’ve compiled some of the most common questions you should ask before entrusting your business and future success in their hands, plus some tips on how they should be answered.
Commitment to independent advice.
Question: Does the network support genuine independent advice, or does it promote specific insurers/markets instead of providing access to a wide market? How is the network perceived by major insurers?
“A network with unrestricted access and a strong reputation among a wide range of insurers is more likely to offer competitive terms, enhanced commissions and the ability to get the deal done for you and your clients.”
Regulatory and Compliance Support.
Question: What level of compliance support does the network provide, and do they have a dedicated compliance team?
“Compliance shouldn’t be just a tick box approach as a robust compliance framework is essential for not allowing you to protect your business but also ensure you can focus on your clients. Your network should provide a dedicated team that offers compliant document templates, file reviews, policy guidance, CPD training, and regulatory updates.”
Technology and IT Solutions.
Question: What IT systems does the network offer, and what investment do they make in ongoing development? Do they provide tailored training support?
“The right technology can streamline operations and boost efficiency. Acturis, a leading solution for UK brokers, requires internal expertise and development time to implement updates that reduce administration and enhance service. Accessing this technology needs to come with robust and regular training.”
Growth, Development Opportunities, and Track Record.
Question: Does the network offer CPD, regular training, market updates, and networking opportunities? What is its track record of supporting ARs?
“It is important there are plenty of opportunities provided by the network to stay current within the industry as well as learn and develop your own understanding of insurance products. Explore what opportunities there are for training on products, regulatory updates, systems updates and what opportunities there are to spend time with fellow AR’s and share knowledge and experiences.”
Fees and Commission Structure.
Question: What are the fees and commission splits, and are they transparent? Are there any additional charges or processing fees?
“Understanding the cost structure helps you to plan ahead and budget for your business. Check specifically about additional services you need to purchase to trade, exit fees if you want to leave, processing fees for transacting business.”
Stability and Longevity of the Network.
Question: How long has the network been operating, and what is its ownership structure?
“A stable, long-established network with consistent leadership is more likely to provide reliable support and avoid sudden disruptions. Look at the comings and goings on the FCA register and explore the rationale for AR’s leaving. Substantial volume of AR leavers needs to be investigated.”
Exit Strategy and Succession Planning.
Question: Does the network offer an exit route or support for succession planning if you decide to sell your business?
“It is likely that this is the first time you have started a business and at some stage you are going to be going through another first which is exiting the business. Understanding the support available to you in the event you wish to exit is an important part of the role your FCA Principal plays to not only ensure smooth transition but maximises the value of your brokerage when you decide the time is to retire or sell.”
Business Culture and Values.
Question: How would you describe the culture of the network, and how do you ensure alignment with the values and working style of your ARs?
“A supportive, transparent culture fosters better relationships, enhances growth, and ensures a positive working environment. Contracts should be well balanced in respect of responsibilities of parties, the team should be partnership focused and focused on supporting you and your clients needs. Misalignment in values can hinder business success.”
The decision to join – or remain with – an AR network should not be taken lightly. While a compelling sales pitch may be enticing, it is essential to look behind the curtain and understand what truly lies beneath. A network that aligns with your vision, provides robust support, and fosters business growth will be best positioned to help you achieve long-term success.
By asking the right questions and conducting thorough due diligence, you can ensure that your chosen AR network is not just a short-term solution but a strategic partner for the future.
