What an Introducer Appointed Representative (IAR) Can and Cannot Do

Understanding the Role of an IAR

When working with Introducer Appointed Representatives (IARs), it’s vital to understand the strict limits of their role under Financial Conduct Authority (FCA) regulations. Many firms confuse IARs with Appointed Representatives (ARs), but the two operate very differently. Misunderstanding these distinctions can lead to serious compliance risks and potential FCA enforcement action.

What an Introducer Appointed Representative Can Do

An IAR’s role is very narrow. Their activities are limited to two main areas:

1. Make Introductions

An IAR can collect a potential customer’s details and pass them to their Principal firm (usually a broker, lender, or group company). Their responsibility is simply to introduce the customer.

They cannot advise, recommend, or complete any transactions. Doing so may be classed as carrying out unauthorised regulated activity.

2. Distribute Approved Financial Promotions

An IAR may share FCA-compliant financial promotions created and approved by the Principal. However, they cannot create or amend these materials themselves. Their role is limited to distribution only.

In short: an IAR can open the door to a conversation but cannot guide the customer through the process.

What an Introducer Appointed Representative Cannot Do

To stay compliant, IARs must avoid crossing into regulated activity. An IAR cannot:

• Advise or recommend financial products

• Negotiate terms or complete transactions

• Handle payments or process claims

• Provide aftersales support or maintain an ongoing customer relationship

Any of the above would fall outside the IAR’s scope and create significant regulatory risks.

How IARs Differ from ARs

An Appointed Representative (AR) operates under broader permissions granted by their Principal and can effectively act as an extension of the Principal’s business. Unlike IARs, ARs can:

• Obtain and process customer information

• Market and sell financial products

• Handle customer service, cancellations, claims, and renewals

• Manage the full end-to-end customer journey

In many ways, being an AR mirrors the responsibilities of being directly authorised by the FCA, provided the Principal has the correct permissions.

Why These Distinctions Matter

Clearly defining the boundaries between IARs and ARs is crucial for:

• Regulatory Compliance – Preventing unauthorised activity and avoiding FCA penalties

• Operational Clarity – Ensuring staff, partners, and introducers understand exactly what their role allows

Compliance Support with ComplianceTrak

At ComplianceTrak, we support dealer groups and financial services businesses in managing their FCA compliance responsibilities with clarity and confidence.

If you’re unsure whether your business should work with IARs or ARs, contact the ComplianceTrak team today for expert guidance.