Appointed representative status got you offering finance quickly — but now the network fee, the single-provider tie and the dependence on someone else's permission are starting to chafe. Moving to direct authorisation is a well-trodden path. It's also a switch with a sequence, and getting the timing wrong can open a gap in which you can't lawfully trade. Here's how firms make the move cleanly.
Why firms make the switch
Direct authorisation puts your own firm on the Financial Services Register with its own permission. That buys you the freedom to work with more than one finance provider, ends the ongoing network fee, and removes the risk that a principal changes its terms — or ends the relationship — on its timetable rather than yours. The trade-off is that compliance responsibility becomes fully yours. The full comparison is in our guide to AR versus direct authorisation; this article is about the mechanics of moving.
The one rule that shapes everything
You can't be both. The AR exemption exists precisely for firms that are not authorised — so the day your own permission takes effect, AR status for those activities ends. That single fact dictates the sequence: apply while you're still an AR, keep trading as an AR throughout the FCA's assessment, and terminate the AR appointment only when your own permission is granted — never before.
The switch, step by step
1. Check your principal agreement first
Before anything else, read the contract: the notice period, any restrictions on applying for your own authorisation while appointed, and any terms about taking pipeline business with you. Most principals deal with departures routinely, but knowing your notice obligations shapes the timetable.
2. Prepare and file a standard application
Being an AR is not a shortcut through the application — you file the same limited permission application as anyone else: regulatory business plan, compliance policies, financials, and an SMF29 candidate for the FCA to assess. You'll disclose your AR history in the application, and it works in your favour: a track record of actually operating the systems and controls you're describing is better evidence than any template. The process end to end is in our step-by-step guide.
3. Trade normally while the FCA assesses it
Your AR status continues unaffected while the application is considered — customers notice nothing. On timing, the decision is the FCA's and it does not commit to a date. Incomplete applications are the main cause of delay: the FCA's assessment does not begin in earnest until it has everything it has asked for.
4. Time the handover
When your permission is granted, coordinate the changeover: agree the termination date with your principal (who notifies the FCA to end the appointment), re-paper your lender relationships under your own FRN, reissue your advertising with your own details under the financial promotions rules, and redirect commission flows. Aim for same-day or next-day. What you must never do is terminate the AR appointment early "in anticipation" — a gap between AR status ending and your permission starting is a period of unauthorised trading.
The golden rule of the switch: stay an AR until the day your own permission is in force. The register — not your intentions — decides when you may trade in your own name.
What changes on day one
From the moment you're directly authorised, you are the accountable firm. That means your own ongoing obligations — RegData returns, the annual fee, notifying the FCA of relevant changes — plus ownership of Consumer Duty outcomes and sign-off of your own promotions. None of it is onerous for a limited permission firm, but it's yours now, not your principal's.
What it costs
The application is a fresh one, so the FCA's application fee applies — currently around £560 for limited permission, non-refundable, and covered in detail in our fees guide — plus whatever you spend preparing the application, and then the FCA's modest annual fee once authorised. Against that sits the network fee you stop paying and the commission terms you can renegotiate with a multi-lender panel; run your own numbers, but for many firms the arithmetic is what prompted the switch in the first place.
Frequently asked questions
- Can we stay an AR while our own application is being assessed?
Usually, yes — there's no regulatory bar on an AR applying for its own authorisation, and trading continues as normal during the assessment. The only constraint is contractual: check your principal agreement for any terms about parallel applications or notice.
- Is the application easier because we've been an AR?
The forms are the same, but your position is stronger: you can evidence systems, promotions sign-off and complaint handling that have actually operated, rather than describing them in the abstract. Disclose the AR history fully — it's an asset, not a complication.
- What if our principal terminates us before we're authorised?
Then you must stop the regulated activity immediately — a pending application gives you no right to trade. Bridge the gap with payment methods that aren't credit or the strict 0% exemption, or appoint under a new principal. Our guide to operating while your application is pending covers the options.
- Do our existing customers and agreements transfer?
Existing credit agreements sit with the lenders and are unaffected by your change of status. Future introductions simply happen under your own FRN once you're authorised. The thing to check is your principal contract's position on pipeline business and any renewal commissions — that's a commercial question, not a regulatory one.
This article is general information to help you understand the process, and is not legal or regulatory advice. CreditLicence is a regulatory consultancy; nothing it provides is regulated advice, and it is not affiliated with, endorsed by, or acting on behalf of the FCA. FCA fees and rules can change; always check the FCA's website for the current position.