AR move unpopular with brokers

Appointed representative status will not be popular with brokers, according to Paul Dyer, marketing director of Towergate.

Dyer predicted that the number of ARs will be low. He said multi-principal partnerships are not likely, as principals would fight over who should take final responsibility. He said insurers are also unlikely to go down the AR route, as the infrastructure for many ARs would be complex and expensive.

Dyer said networks are looking at the ARs, but the cost of providing compliance services is difficult to ascertain at this stage and it is not clear how they will proceed.

He said: "Principals need to see ARs as if they are in their department. Becoming an AR does not mean you can forget about compliance as the approved persons regime will apply to all ARs. It will be a strict partnership and a cultural change.

"AR status is not a get-out clause, brokers need to understand what they are getting and whether it is value for money."

Principals will provide training, competency testing, principal reviews, complaints logging, and financial solvency testing.