Further to an alert issued in 2016, on the 3rd November 2017 the FCA issued an alert for firms with appointed representatives and introducer appointed representatives (“ARs”), setting out the standards that they expect in that area.
The FCA highlights the risk of introducers wielding inappropriate influence and straying into giving advice, e.g. where the referral to the firm already includes completed documentation expressing a particular investment desire. Some of the underlying investments may be closely linked to introducers or ARs. Another risk is where ARs wrongly use the firm reference number from their appointment by their principal to carry out additional regulatory activities separate from their business arrangement with the principal.
The FCA exhorts authorised firms to have adequate oversight of their ARs and introducers, as principals are responsible for any regulated activities carried on by their ARs. Firms should be aware of all activities carried out by their ARs and undertake sufficient due diligence on their ARs.
The full alert is here.