Relationships with ARs and introducers - a reminder

The FCA has longstanding concerns about some aspects of the relationships between principal firms and their introducers and appointed representatives. It has recently issued a further alert to re-emphasise the key issues. The main concerns relate to the potential for undue influence on the principal being exercised by introducers, appointed representatives or introducer appointed representatives (ARs) and ineffective due diligence being conducted by principal firms on these relationships.

When an introduction is made, the suitability of the recommendation that follows is the responsibility of the firm making the recommendation. The FCA has seen instances where undue influence on the recommendation has been exerted on the principal firm, with documentation sometimes already completed. This may often be completed by the individual making the introduction, even though they aren't authorised to do so.

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