Kay runs a small mortgage advice firm that is not itself authorised. It is an appointed representative of Network Ltd, an FCA-authorised principal. A client complains about advice Kay gave. Who is responsible to the regulator and the client for that advice?
An appointed representative is exempt from the need for authorisation for the activities its principal has accepted responsibility for in writing (FSMA 2000 s39). The principal must oversee its ARs and is responsible for their regulated activities, including complaints (SUP 12; DISP 1.1). The exemption applies only because the principal takes on that responsibility. The FCA does not take responsibility for advice; it regulates the principal.
Thinking an appointed representative answers for its own advice like an authorised firm.
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