You may have been part of a network and are considering going directly authorised for the first time. You may have been part of a larger firm and have now decided you want some control over your destiny. Or you may be moving into advising for the first time ever and setting up your own business.
If so, what to do, what to expect and what to avoid? In our three-part series with illuminate, we consider these questions against the three elements we think are necessary when going it alone:
In part one, we’ll consider applying for your authorisation with the FCA.
Think high level. Think of the business overall (forget for a moment what type of business it is; it wouldn’t matter if it was an advisory firm or a greengrocers). What is important is:
As well as enabling you to compile a thorough business plan for yourself, it will also provide the basis of your application to the FCA for direct authorisation, as they also want to see a viable and sustainable business.
After that, you can focus on the fact your business happens to be in financial services, and be thinking about:
In a word; challenge. You should expect to be challenged. The FCA has a duty to help protect consumers, and this means they will consider, and potentially challenge:
Expect to be Googled and for any gaps or inconsistencies to be highlighted and questioned. This isn’t to cause you difficulty; it’s to attempt to weed out any ‘bad’ apples and thus protect the general public.
The experience we, and our advisers, have had however is a positive one. You will be assigned a case worker who will email and chat with you, like an actual human (something we can forget applies to FCA employees).
The timescales to get approval are legendary (not in a good way) but we’ve found that this is simply due to the existing backlog and that actually, once an application has been assigned to a case worker, the process from that point is relatively swift. That said, when you initially apply your application will go into a ‘black hole’ of sorts; there’s no way of tracking it or knowing when it might be looked at, until it gets picked up. But after that, things will move pretty quickly…
Typically the biggest issues occur where a firm has rushed into the process, tried to whack an FCA application in to get it under way, and then spend months having to amend plans, cashflows and figures. So avoid this. A considered, practical approach, coming from a true intention of business planning is a far more efficient route.
Don’t be overly optimistic; this is business after all. It won’t be smooth sailing – the more realistic you are about your potential risks, limitations and threats, the more you prepare yourself for any problems and the more favourably the regulator will view your application. Nothing wrong with a healthy dose of realism.
Final thing to avoid; the horror stories. Going it alone, and the FCA application process really aren’t as scary as some people think. And I’ve yet to meet an adviser who regretted doing it!