Direct Authorisation
What is Direct Authorisation?
Direct Authorisation (DA) means your brokerage is authorised and regulated directly by the FCA. Rather than operating under another firm’s permissions, your business holds its own regulatory permissions and is responsible for meeting all FCA requirements.
This route gives you full control over how your business operates, but it also brings greater regulatory responsibility. You will be accountable for areas such as governance, compliance, Consumer Duty, financial resources, complaints handling and regulatory reporting.
For many brokers, Direct Authorisation is the preferred long-term option as it provides independence and allows the business to build its own identity, proposition and insurer relationships.
Is Direct Authorisation right for you?
There is no right or wrong route. The best option will depend on your experience, resources, growth plans and appetite for regulatory responsibility.
Advantages
- Greater independence You control how the business is run, the products and services you offer, and the direction of your long-term strategy.
- Your own FCA permissions You are authorised in your own right and build your own regulatory track record with the FCA.
- Control of insurer relationships You can develop your own agency agreements, insurer partnerships and market proposition.
- Business value Over time Direct authorisation can increase the value of the business as the permissions and customer relationships sit within your own firm.
Things to Consider
- Longer route to market The FCA has up to six months to assess a complete application and up to 12 months where additional information or clarification is required.
- Higher regulatory responsibility You will need to demonstrate that your business can meet FCA requirements from day one and continue to do so after authorisation is granted.
- Additional cost and resource There are application fees, Professional Indemnity Insurance requirements, capital requirements and ongoing compliance obligations to consider.
- Accountability Senior managers and directors have personal responsibilities under the Senior Managers & Certification Regime (SM&CR).
Budgeting for Direct Authorisation
Launching a directly authorised brokerage requires investment beyond the FCA application itself. When preparing your budget, consider the costs associated with obtaining authorisation and establishing the infrastructure needed to operate the business from day one.
Typical costs may include:
- FCA application fees.
- Professional Indemnity Insurance.
- Regulatory capital requirements.
- Compliance support and advice.
- Technology and software.
- Professional advisers, including legal and accounting support.
- Staff, premises and operational expenses.
Most general insurance intermediaries fall within Category 4 of the FCA’s application fee structure, which rries an application fee of £2,820 (Correct as at November 2026.) Application fees can change and should always be checked on the FCA website before submitting your application.
It’s also important to remember that authorisation can take several months. Many start-up brokers underestimate the amount of working capital required before the business begins generating sustainable income. Building realistic assumptions into your financial forecasts can help avoid unnecessary pressure during the early stages of trading.
What you'll need to apply
A successful application is built around demonstrating that your business is ready, willing and organised to carry out regulated activities.
As part of the application process, you’ll need to submit a Regulatory Business Plan explaining how your business will operate, how it will be governed and how it will deliver good customer outcomes. The FCA will also want to understand your financial position, regulatory permissions, compliance arrangements and the controls you have in place to support the business.
The Regulatory Business Plan is one of the most important parts of the application. It should be tailored to your business model and demonstrate that you have thought carefully about how the business will operate in practice. Generic or template-based submissions are unlikely to provide the level of detail the FCA expects.
The next pages of this hub will guide you through each section of the Regulatory Business Plan, explaining what the FCA is looking for, what good looks like and common pitfalls to avoid.
Additional FCA Support
If you’re considering Direct Authorisation, it’s worth knowing that the FCA offers support before you submit a formal application.
Through its Pre-Application Support Service (PASS), prospective firms can ask questions, discuss their proposed business model and gain a better understanding of the regulator’s expectations before entering the authorisation process. The FCA also offers free pre-application meetings, which can be particularly valuable where a proposition is complex, innovative or involves areas where regulatory clarity is needed.
These discussions are not a formal assessment and do not guarantee authorisation. However, they can help firms identify potential issues early, improve the quality of their application and better understand the permissions, governance arrangements, resources and controls that may be required.
To get the most value from a pre-application discussion, firms should be prepared to explain their business model, proposed activities, target customers, governance arrangements and financial resources, as well as any areas where further regulatory guidance is required.
What's next?
Receiving FCA authorisation is a significant milestone, but it’s only the start of building a successful brokerage.
Once authorised, your focus shifts from obtaining regulatory approval to getting your business ready to trade, securing insurer and market access, implementing systems and technology, attracting and retaining customers, and creating the operational foundations needed for long-term growth.
Explore the next stage of the journey in our Getting Ready to Trade section, where you’ll find practical guidance on turning your business plan into a successful and scalable brokerage.
Not sure direct authorisation is right?
Most new brokerages start as an Appointed Representative and apply for their own permissions later.
**The information in this Hub is of a general nature, for guidance only and is not intended to address the circumstances of any particular individual or entity. We do not guarantee or verify the accuracy, completeness or suitability of the content. To the fullest extent permitted by law, BIBA and Intact Insurance cannot accept any responsibility for any loss occasioned to any person or entity arising from reliance on the information in this Hub. Read our website terms of use >https://www.biba.org.uk/terms-conditions/.
