Direct FCA Authorisation vs AR vs IAR — What’s Best for Your Dealership?
- 5 days ago
- 4 min read
If your dealership sells vehicle finance, GAP insurance, warranties, or other regulated products, you must operate in line with the rules of the Financial Conduct Authority (FCA).
One of the most important decisions you’ll make is how you are authorised to carry out regulated activity. For UK motor dealers, this usually means choosing between:
Direct FCA Authorisation
Appointed Representative (AR)
Introducer Appointed Representative (IAR)
Each option comes with different levels of responsibility, cost, risk, and control. In this guide, we clearly explain the differences so you can decide which FCA route is right for your dealership.
What Is Direct FCA Authorisation?
Direct FCA Authorisation means your dealership applies directly to the FCA and becomes fully authorised in its own right.
Key Features of Direct FCA Authorisation
You hold your own FCA permissions
You are fully responsible for compliance and reporting
You deal directly with the FCA
You manage audits, training, and regulatory changes yourself
Pros
Full operational independence
No reliance on a Principal Firm
Complete control over processes and partners
Cons
Higher setup and ongoing costs
Significant compliance workload
Greater regulatory risk exposure
Requires dedicated compliance expertise
Direct authorisation is usually chosen by large dealer groups with internal compliance teams and strong governance structures.
What Is an Appointed Representative (AR)?
An Appointed Representative (AR) operates under the FCA permissions of a Principal Firm, such as ComplianceTrak.
Instead of holding direct FCA authorisation, your dealership is “appointed” by the Principal, who becomes responsible for regulatory oversight.
Key Features of AR Status
FCA authorisation is covered by the Principal Firm
Compliance oversight and governance are provided
Ongoing monitoring and audits are included
Regulatory reporting is managed centrally
Pros
Faster onboarding than direct authorisation
Lower regulatory burden
Reduced compliance risk
Expert regulatory support
Cons
Less independence than direct authorisation
Must operate within Principal Firm frameworks
For most dealerships, AR status provides the best balance between compliance protection and operational flexibility.
What Is an Introducer Appointed Representative (IAR)?
An Introducer Appointed Representative (IAR) is a lighter regulatory model. Instead of selling regulated products directly, the dealership only introduces customers to a fully authorised finance provider.
Key Features of IAR Status
You do not give regulated advice
You do not arrange finance
You simply pass customer details to a lender or broker
Lower regulatory obligations
Pros
Simplified compliance requirements
Lower cost structure
Reduced operational complexity
Cons
Limited revenue opportunities
Less control over the customer journey
Reduced upsell potential
IAR models are often used by smaller dealerships or businesses wanting minimal regulatory involvement.
Direct FCA Authorisation vs AR vs IAR — Key Differences
Feature | Direct Authorisation | AR | IAR |
FCA Permissions | Held by the dealership | Held by Principal | Held by Principal |
Compliance Responsibility | Dealership | Shared with Principal | Minimal |
Regulatory Risk | High | Medium | Low |
Operational Control | High | Medium | Low |
Revenue Potential | High | High | Limited |
Setup Speed | Slow | Fast | Fast |
Which Option Is Best for Your Dealership?
Choose Direct FCA Authorisation if:
You operate a large dealer group
You want total independence
You have in-house compliance resources
Choose AR Status if:
You want full product-selling capability
You want expert regulatory support
You want lower risk and faster setup
You value structured compliance systems
Choose IAR Status if:
You only want to introduce finance leads
You want minimal regulatory responsibility
You prefer simplicity over control
For most UK motor dealers, Appointed Representative status offers the strongest mix of protection, efficiency, and growth potential.
Not Sure Which FCA Route Is Right for You?
Choosing between Direct FCA Authorisation vs AR vs IAR isn’t always straightforward. The right option depends on your dealership size, risk appetite, growth plans, and internal compliance capability.
ComplianceTrak works with dealerships at every stage — from first-time FCA applicants to large, directly authorised dealer groups — helping you understand your options and choose the most appropriate regulatory route.
Support for Dealerships Choosing Direct FCA Authorisation
While many dealerships choose to operate as an Appointed Representative, some businesses prefer Direct FCA Authorisation as part of their long-term strategy.
In these cases, ComplianceTrak also supports directly authorised dealerships by providing:
FCA-aligned compliance systems and controls
Training and Competence frameworks
Staff training through structured learning platforms
Compliance consultancy and regulatory guidance
Support with Consumer Duty, audits, and FCA expectations
This enables directly authorised dealers to meet FCA requirements without building large in-house compliance teams from day one, while retaining full control of their permissions.
Support for Directly Authorised Dealerships
If your dealership is pursuing or already holds Direct FCA Authorisation, having the right systems and training in place is essential.
ComplianceTrak supports directly authorised dealers with FCA-aligned software, staff training, compliance consultancy, and ongoing regulatory guidance.
Why Many Dealerships Choose ComplianceTrak
ComplianceTrak provides a specialist FCA compliance ecosystem built specifically for the automotive industry.
Dealerships benefit from:
FCA Principal oversight for ARs
Automotive-focused compliance expertise
End-to-end customer journey systems
Training delivery and competence tracking
Vulnerable customer identification and support
Audit-ready documentation and reporting
Whether operating as an AR or directly authorised, dealerships can rely on ComplianceTrak to simplify compliance and reduce regulatory risk.
Final Thoughts: Making the Right FCA Decision
Choosing between Direct FCA Authorisation vs AR vs IAR is one of the most important regulatory decisions your dealership will make.
Direct authorisation offers independence but comes with significant responsibility. IAR status offers simplicity but limits opportunity. For many dealerships, operating as an Appointed Representative provides the ideal balance of commercial flexibility, regulatory protection, and expert support.
Whichever route you choose, having the right systems, training, and compliance framework in place is essential to meeting FCA expectations and delivering good outcomes for customers.
Ready to Take the Next Step?
Whether you’re comparing Direct FCA Authorisation vs AR vs IAR, reviewing your current setup, or planning future growth, understanding your compliance position is critical.
A short conversation with a compliance specialist can help clarify your options and highlight the most practical path forward for your dealership.
Comments