Business model
Start by explaining what your brokerage does and who it serves.
The strongest applications move beyond a simple description of products and explain why customers will choose the business. For example, you may specialise in a particular industry sector, customer type or insurance class, or have expertise that differentiates you from more generalist brokers.
When reading your application, the FCA should quickly be able to understand:
The FCA wants to understand exactly what permissions you are applying for and why they are necessary.
Your application should clearly link the regulated activities you have selected to the services you intend to provide. This helps demonstrate that the permissions requested have been carefully considered rather than selected on a precautionary basis.
For example, if you intend to advise on and arrange commercial insurance policies, explain how those permissions support your proposed operating model and customer proposition.
Where activities will be outsourced or undertaken by another organisation, this should also be clearly explained.
The FCA is interested in understanding how you expect to win customers and whether your growth plans are realistic.
This is not about producing a detailed marketing strategy. Instead, focus on explaining where your business will come from and why those sources are credible.
Common acquisition channels might include:
The FCA will want assurance that your customer acquisition plans align with your target market and support the forecasts included within your business plan.
If your business relies on introducers, lead generators or referral arrangements, provide enough detail for the FCA to understand how these relationships will operate.
You should explain:
The FCA will expect you to retain responsibility for the customer outcome, even where parts of the customer journey involve third parties.
If you are already trading in another capacity, explain your existing customer base and how FCA authorisation will impact those relationships.
This may include information about the types of customers you currently serve, the services you provide today and any additional activities that authorisation will enable you to undertake.
The FCA wants to understand whether customers could be affected by the transition to regulated activities and how that transition will be managed.
Your application should explain how the business will generate income and how charges will be communicated to customers.
This may include:
The FCA will be interested in understanding how your remuneration model supports good customer outcomes and how fees will be disclosed in a clear and transparent manner.
Where commissions are received from insurers, it can be helpful to explain how this will be communicated to customers and how any potential conflicts of interest will be managed.
If you intend to hold client money, explain how funds will be managed and protected.
The FCA is not necessarily looking for extensive technical detail in this section, but it will expect you to demonstrate that you understand the implications of holding client money and have considered the associated operational and regulatory requirements.
If you do not intend to hold client money, make this clear and explain the arrangements that will apply instead.
Find out more about managing Client Money>
The FCA recognises that all businesses evolve, but it wants confidence that your growth plans are realistic and achievable.
Your submission should explain how you expect the business to develop over the next three to five years, including any plans for recruitment, expansion into new markets or development of new services.
Growth forecasts do not need to be ambitious to be credible. In many cases, realistic and well-supported projections can provide greater confidence than aggressive growth assumptions.
