In 1998, 10 years after the start of regulation, some 80% of advisers were acting as appointed representatives (ARs) of networks or of larger IFAs. Over the last 10 years though this has fallen back to probably a bit less than 50%. Increasingly firms now have the confidence, the ability and the support to enable them to operate compliantly, and far more profitably, under direct regulation. Two things have undermined the network as a business model. First, during the pensions review and the so called ‘low cost endowment mis-selling scandal’ it seemed that the principles of common law and natural justice had been consigned to the dustbin, with many cases of compensation being awarded to people who had no cause to be compensated. Second and conversely, the rotten few could make quick profits by mis-selling and leave all the liability on the network. To counteract this, the networks began carefully constructing contracts designed to transfer the liability for any claims back on to the AR.

Appointed Representatives

However a recent judgement has clarified the situation by, quite properly, putting the liability squarely back on the network as the regulated entity. Further, the Senior Managers regime exposes senior individuals within the network to the possibility of personal fines and censor. Are networks a dying breed? Apart from those that specialise in more esoteric areas the answer is probably ‘yes’. And this is not a bad thing it is progression as our industry becomes more and more well qualified and professional.


The above is the lead article in our latest monthly News Notes – June 2018. Other topics in this edition include:

  • Sharia-Compliant Accounts
  • Pensions Watchdog
  • Advice Allowance
  • Data Protection Act 2018
  • MiFID2 and GDPR Checklists

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Haven Risk Management : FCA Compliance Consultants