Thinking of setting up your own financial advice firm?
One of the biggest early decisions is whether to become directly authorised by the FCA or operate under an appointed representative (AR) network. For advisers leaning towards direct authorisation, understanding the process upfront helps avoid surprises later.
This guide covers what direct authorisation means, the benefits and challenges, and the steps involved.
Setting up your systems? Book a demo to see how Glimzer supports newly authorised advice firms.
What does "directly authorised" mean?
Being directly authorised means your firm is approved by the Financial Conduct Authority (FCA) to provide regulated financial advice in its own right.
What that looks like in practice:
- Your firm holds its own FCA permissions
- You are responsible for compliance, systems, and client outcomes
- You have more freedom, but also more accountability
Rather than relying on a network's oversight, the responsibility sits with you and your firm.
Benefits of becoming directly authorised
Most advisers choose direct authorisation because of the control it gives them.
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Full control over your business and branding. You decide how your firm operates and presents itself.
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Freedom to choose technology and partners. You are not restricted to network-approved systems or providers.
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Retain 100% of client revenue. There is no ongoing revenue split with a principal firm.
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Build long-term equity. A directly authorised firm can become a valuable asset over time.
FCA direct authorisation process (step by step)
The process can feel daunting, but it follows a clear structure.
1. Decide your business model
Work out whether you are setting up as:
- A sole adviser
- A small advice firm
- A larger practice with multiple advisers
Your model influences permissions, systems, and costs.
2. Prepare your application
You will need to document how your firm will operate, including:
- A business plan
- Financial forecasts
- Compliance policies and procedures
- How you will treat customers fairly and manage risk
Getting this right makes a big difference to timelines later on.
3. Submit via FCA Connect
Applications are submitted through FCA Connect, the FCA's online portal. Incomplete applications can delay approval, so accuracy matters here.
4. Pay the application fees
Fees vary depending on the permissions you are applying for and the scope of advice you plan to offer.
5. Await FCA review
The FCA typically takes three to six months to review an application, though this can vary.
During this period, the FCA may ask follow-up questions or request clarification.
6. Set up your back-office systems
Before authorisation, you will need appropriate systems in place, such as:
- A CRM to manage clients and advice workflows
- Compliance monitoring processes
- Secure document storage and record keeping
These systems form a key part of your regulatory framework.
Costs involved
Becoming directly authorised involves both upfront and ongoing costs.
Typical costs include:
- FCA application fee (from around £1,500 upwards, depending on permissions)
- Ongoing FCA regulatory fees
- Compliance consultancy (optional, but often recommended)
- Technology and back-office systems
Planning for these costs early helps avoid pressure during the application phase.
Challenges to consider
There are a few things to be aware of:
- Compliance responsibility sits entirely with your firm
- Regulatory reporting must be accurate and timely
- The initial admin workload can be high
Most advisers find that the right systems and processes reduce the ongoing burden considerably. A purpose-built CRM with compliance workflows and audit trails can help manage these responsibilities from day one.
Wrapping up
Becoming directly authorised by the FCA is a big step, but for many advisers it is the right foundation for building an independent business.
With good preparation, the right systems, and a clear understanding of what's involved, firms can make the transition smoothly and focus on delivering good outcomes for clients.
For advisers who value control, transparency, and long-term flexibility, direct authorisation is often worth the effort.
Building your firm's tech stack? Book a demo to see how Glimzer supports directly authorised advice firms with pipeline management, client servicing, and compliance workflows.