For most brokers, the hard part is not completing the FCA forms. It is showing that the business behind those forms is properly thought through, adequately resourced and ready to operate.
A credible application reflects a brokerage that is ready to trade responsibly from day one—not a set of controls that will be worked out later.
Important: This is general information, not legal, regulatory, tax or compliance advice. Requirements depend on your legal structure, permission set, products, client-money arrangements, insurance distribution, consumer-credit activities and wider model. Check the current FCA Handbook and obtain specialist advice where appropriate.
01 · Orientation
Direct authorisation: what changes in practice
A directly authorised, or DA, mortgage brokerage holds its own FCA authorisation and Firm Reference Number (FRN). Its FCA permissions determine the regulated activities the firm is authorised to carry out. Independent mortgage brokers may choose to become directly authorised or operate as an appointed representative (AR) of a principal firm, depending on how they want to structure their business and regulatory responsibilities.1
That distinction matters. FCA authorisation is not a blanket licence for every mortgage, insurance or credit service. The permissions have to match the way the firm will work. A residential mortgage adviser may need a relatively straightforward set; a firm covering protection, second charges, lifetime mortgages, consumer buy-to-let or credit activities may need a broader perimeter review. The customer journey, rather than the firm’s preferred label for itself, should drive the analysis.
An application in progress is not permission to trade. Unless another route applies, regulated activity must wait until the relevant authorisation is in force. The FCA warns that unauthorised regulated activity can be a criminal offence.2
02 · Structural choice
AR or DA? Which route is right for your firm?
There is no universal “better” structure. An AR carries out agreed regulated activities under a principal firm, which accepts regulatory responsibility for activity within the scope of the appointment. A DA firm answers to the FCA in its own right. Direct authorisation brings more freedom, but it also brings additional responsibilities: the brokerage must fund, run and evidence its own control environment.
| Area | Appointed representative | Directly authorised |
|---|---|---|
| Regulatory position | Operates within the principal’s appointment and permissions. | Holds its own permission set and FRN. |
| Framework | Usually follows the principal’s policies, systems and supervision. | Designs, runs, tests and evidences its own controls. |
| Commercial control | May face network restrictions, charges, panels or revenue share. | Greater choice, subject to direct regulatory and provider requirements. |
| Oversight | Principal supervises regulated activity. | Firm supervises advisers and any ARs it appoints. |
| Reporting | Much regulatory reporting is handled through the principal’s framework. | Firm owns applicable returns, notifications and attestations. |
| Cost profile | Contractual fees and restrictions vary by principal. | PII, capital, compliance, systems, reporting and management time sit directly with the firm. |
The FCA points to three situations in which an AR may need to reconsider the relationship: the AR has grown large relative to its principal, conflicts are making oversight difficult, or the two businesses are moving in different strategic directions. Even then, DA should not be treated as a promotion. It is a transfer of responsibility for compliance, liabilities, senior management and the systems needed to run the firm properly.3
03 · The FCA lens
How the FCA will look at your business
A complete pack is only the starting point. The FCA must be satisfied that the firm will meet, and continue to meet, the Threshold conditions. These are the regulator’s minimum standards, applied in a way that reflects the nature, scale and complexity of the proposed business.4
1Effective supervisionOwnership, structure, locations, outsourcing and information access
The case officer needs a clear view of who owns the firm, where decisions are made and who is accountable for each regulated function. The same applies to advisers, administrators, outsourced services and any overseas activity. If the structure is difficult to explain on a page, it is likely to be difficult to supervise in practice.
2Appropriate resourcesFinancial and operational capacity
Capital and liquidity are part of the answer, not the whole answer. The FCA will also look at management experience, compliance capability, adviser supervision, technology, cyber security, quality assurance, management information and business continuity. Above all, the resources must fit the forecast. A one-adviser firm predicting a very large case volume needs a convincing explanation of how the work and oversight will be handled.
3Suitability and candourHonesty, integrity, reputation, competence and financial soundness
Disclose relevant matters fully and explain them in context. Do not decide on the FCA’s behalf that something is too minor to mention. Its mortgage-broker guidance specifically refers to removal from lender or product-provider panels and warns that withholding information can raise questions about honesty and integrity.1
4A coherent business modelVolumes, lead sources, people, controls and economics must reconcile
The business plan, forecasts and operating model should describe the same firm. The Handbook allows the FCA to consider the assumptions behind the model, its viability and longer-term profitability, consumer needs, governance, growth plans and the external environment. Strong revenue projections carry little weight if there is no credible plan for adviser capacity, administration, supervision, cash flow and technology.5
The practical test
Ready, willing and organised
This phrase is worth taking literally. Key roles should be filled, the financial information should be complete, and the systems needed to carry out the regulated work should be configured and usable. The FCA is not inviting applicants to send a template business plan and develop the real operation with the case officer later.2
04 · Application route
From business model to application
The Connect form should reflect a business model that has already been clearly defined. Start by setting out how the brokerage will operate, then use this to determine the permissions, regulatory requirements, controls and supporting evidence that need to be captured in the application.
1Define the legal and commercial modelDecide exactly what the firm will do before drafting the pack
Define the model clearly before drafting the regulatory detail. Which entity is applying? Who owns it? Where will advice be given? Which customers and mortgage types will it serve? How will the firm earn money, generate leads and use introducers? What will be outsourced? How many advisers and administrators will it need? These answers should remain consistent throughout the application.
- Remote, face-to-face or hybrid advice
- Residential, BTL, second charge or later life
- Broker fee and commission model
- Lead source and introducer due diligence
- Employed or self-employed advisers
- Outsourced administration and technology
2Map activities to permissionsConnect the perimeter analysis to the customer journey
Follow the customer journey from the first advert through enquiry, advice, arrangement, any protection sale and post-completion support. Decide which steps are regulated, excluded or unregulated. Another brokerage’s permission profile is not a reliable shortcut: small differences in products, remuneration or process can change the analysis. The business plan should give a clear reason for every permission requested.
3Allocate governance and accountabilityIdentify SMFs, certification roles, responsibilities and oversight
The Senior Managers and Certification Regime applies to solo-regulated firms. Relevant Senior Management Functions must be approved before the person begins the role, and each SMF needs a Statement of Responsibilities. The firm must also establish whether it is Limited Scope, Core or Enhanced, because that classification changes the detail of the regime.6
The paperwork should reflect the real allocation of work. Prepare clear role descriptions, CVs, required criminal-record checks, qualification evidence, regulatory references, fit-and-proper arrangements and an organisation chart that a case officer can follow. Mortgage advisers can fall within the Certification Regime even when they are not Senior Managers.
4Build the live control environmentPolicies should connect to real people, screens, fields and review routines
Policies need to be more than well-written statements of intent. The advice process, file standards, vulnerable-customer support, complaints handling, conflicts, financial crime, promotions, data security, outsourcing, continuity planning, supervision and QA all need named owners and workable procedures. Staff should be able to carry out those procedures in the systems the firm intends to use.
5Prepare financials, capital and PIIShow how the firm will remain liquid and resilient
Use the current FCA financial data template and ensure every important assumption can be traced back to activity, capacity and cash timing. The figures should align with the firm’s profitability, capital and liquidity position.7
6Run a consistency and readiness reviewTreat contradictions as application defects
Review the application as a whole to ensure the RBP, financial forecasts, permissions, people, policies, website and customer journey are consistent with one another. Then test the proposed process using a realistic sample case to confirm it works as intended.
7Submit through Connect and manage the casePay the fee, respond promptly and keep the business current
Once submitted, the FCA assigns a case officer, assesses the firm against its minimum standards and may compare the information with records held by other regulators. Questions are normal.2 Give one person responsibility for coordinating replies, keep a clear log of questions and evidence, and answer the point asked. If something material changes while the application is being assessed, tell the FCA rather than letting the original pack become misleading.
05 · Application pack
Documents Matter. The links between them matter more.
The FCA’s current mortgage-applicant checklist is extensive. It covers the mortgage supplement, core details, approved-person forms, an IT self-assessment and, where relevant, information about controllers, significant events, owners and influencers or a sole trader. The supporting material ranges from the regulatory business plan and forecasts to Consumer Duty, complaints, vulnerability, conflicts, compliance monitoring, financial crime, technology, competence, remuneration, target-market research, management information and the advice process.8
Policies, processes and oversight should work together rather than sit as separate documents. A policy should shape how cases are handled, that process should create a clear record, and management should be able to see whether the control is operating effectively. This connection between policy, action and evidence is often more meaningful than adding further regulatory wording.
ABusiness Model and financial evidenceThe story of the business and how it remains viable
- Tailored regulatory business plan
- Permissions rationale and perimeter map
- Three-year forecasts and assumptions
- Liquidity, capital and downside analysis
- Ownership, close links and structure charts
- Wind-down thinking where relevant
BPeople and accountabilityEvidence that the firm is competently led and supervised
- SMF forms and responsibilities
- Senior-manager CVs and checks
- Adviser qualifications and competence
- Recruitment and regulatory references
- Training and competence framework
- Remuneration, supervision and capacity
CCustomer journey and conductHow advice standards and Consumer Duty work in practice
- Target market and product scope
- Fact-find and suitability process
- Vulnerability identification and support
- Fair-value assessment
- Customer-understanding testing
- Complaints and root-cause analysis
DSystems, controls and oversightOperational machinery behind the application narrative
- Compliance monitoring plan and QA
- Financial promotions approval
- Financial crime and sanctions controls
- Technology, cyber and resilience
- Outsourcing due diligence and oversight
- MI definitions, owners and escalation
Where Achos fits
Good case management should leave a clear trail
When a file is reviewed months later, the team should not have to piece the story together from inboxes, spreadsheets and memory. Achos brings fact finds, stages, tasks, documents, communications and audit history into one case-management environment, so advisers and managers can see what happened, what is still outstanding and who owns the next action.
A necessary caveat: technology can support a sound operating model, but it cannot decide which permissions a firm needs, replace compliance judgement or guarantee authorisation.
Explore how Achos works06 · Customer outcomes
Consumer Duty: show how the firm will judge outcomes
Where the Duty applies, the FCA expects he application to explain how the brokerage will recognise a good or poor outcome, what information it will review and what it will do when the evidence points to a problem in addition to clear policies set in place. Applicants are encouraged to tailor material covering target markets, product and service governance, fair value, customer-understanding testing and customer-support monitoring.9
What useful mortgage-broker MI might include
A dashboard is not useful simply because it contains a lot of numbers. Each measure needs a definition, a source, an owner, a review frequency and some agreement about when action is required. Depending on the firm, useful indicators could include:
- Advice-file QA outcomes and repeat themes
- Customer journey time and stalled-case causes
- Fees by product and customer cohort
- Complaints, root causes and redress
- Vulnerability needs and support outcomes
- Communication testing and comprehension
- Product distribution outside target market
- Introducer quality and conversion anomalies
- Cancellations, declines and lender feedback
- Adviser supervision and competence actions
The FCA’s strategy for mortgage intermediaries makes the supervisory priorities fairly clear: suitability, customer understanding, quality assurance, sales incentives, fees and financial promotions. On fair value, it says competitor price comparisons alone do not go far enough.10
07 · Financial readiness
Beyond the Minimum: The True Cost of Direct Authorisation
Application fee and timing
Most mortgage-broker and financial-intermediary applications fall into pricing Category 4. At 27 August 2026, that means an application fee of £2,820. The FCA describes the fee as non-refundable, and it sits separately from the annual periodic fees a firm pays once authorised.11
The FCA’s published timetable says a complete FSMA application will usually be assessed within six months, while an incomplete application can take up to 12 months. It is also measuring performance against proposed faster targets—four months for a complete new-firm application and ten months for an incomplete one—from January 2026. Those are useful signs of direction, but a sensible project plan should still allow for the published timetable and the possibility of follow-up questions.212
Costs to consider
Direct authorisation involves more than the initial FCA application fee
Direct authorisation involves more than the initial FCA application fee. The wider cost can include regulatory capital, PII premium and excess exposure, FCA fees and levies, compliance support, professional advice, software, cyber security, training, quality assurance and reporting. Management time is also worth including in the overall budget, particularly for smaller firms where directors may combine regulatory oversight with client and business responsibilities.
Capital resources
The capital calculation depends on the firm’s activities and whether it holds client money or assets. One commonly relevant rule is MIPRU 4.2.11. For a firm carrying on insurance distribution or home-finance mediation, and no other regulated activity, the requirement without client money or assets is the higher of £5,000 and 2.5% of annual income. Where the firm does hold client money or assets for those activities, the figures are the higher of £10,000 and 5% of annual income.13
This calculation is intended as an illustration of one possible scenario. The appropriate figure will depend on the firm’s specific activities and permission set. It can also be helpful to consider whether additional liquidity would support day-to-day operating needs, such as payroll, variations in completion timing, commission adjustments and other business costs.
Professional indemnity insurance
MIPRU 3 sets the relevant PII rules, including cover for the firm and people for whom it is responsible, legal defence costs, continuous cover and Ombudsman awards. Minimum limits are not identical for every intermediary: the Handbook distinguishes, for example, between certain home-finance intermediaries and MCD credit intermediaries, and it also contains rules on excesses and additional capital.14
It is advisable to speak with a PII broker early and provide a clear picture of the firm’s proposed activities. Review the policy’s exclusions, retroactive date, excess and aggregate limit, together with any related capital requirements, to ensure the cover is well aligned with the activities set out in the application.
08 · Moving structure
Moving from AR to DA seamlessly
For an AR moving to direct authorisation, securing FCA approval is only one part of the transition. They will also need to plan their exit from the principal arrangement, including contractual notice periods, client ownership, data access, historic liabilities and lender or provider panel arrangements. The FCA also recommends notifying the principal that a reference may be required, agreeing how historic client files will remain accessible and confirming how existing customers will continue to be supported during the transition.3
1Protect continuity and clarify responsibilityMake sure every live and historic case has a clear owner
Plan the transition at case level. Separate historic AR business, pipeline cases and new DA business, then define who will be responsible for complaints, remediation, file access and customer communication in each category. The aim is to ensure the brokerage, principal and customer all have the same understanding of who is responsible at every stage.
2Sequence the commercial dependenciesAuthorisation is only one part of becoming operational
Map the commercial requirements alongside the FCA application, including lender panels, mortgage-club access, sourcing systems, protection agencies, fee collection, PII, data migration, disclosures and staff contracts. Some of these can be prepared in advance, while others may depend on the new FRN or the effective date of authorisation. Agreeing the sequence early helps create a smoother transition.
3Keep the customer journey simpleCommunicate clearly once responsibilities and timings are confirmed
Customers do not need visibility of the internal transition plan, but they should have a clear understanding of who is advising them, who holds their data, who will handle any complaint and whether their service will change. A well-planned move should maintain continuity and minimise unnecessary duplication, delays or repeated information requests.
09 · Day two and beyond
Running your firm after FCA authorisation
Once authorised, the focus shifts to maintaining strong oversight and consistent standards across the business. This includes customer outcomes, case records, marketing, financial resilience and keeping your permissions aligned with the activities your firm carries out.
The FCA’s decision marks the end of the application process, but the firm’s regulatory responsibilities continue. Once authorised, the firm must continue to meet the Threshold Conditions and the requirements that apply to its activities. This includes maintaining appropriate resources and PII where required, overseeing advisers, monitoring customer outcomes, managing complaints and financial promotions, responding to changes in the business, and completing required FCA notifications and regulatory returns on time.
A sensible post-authorisation calendar
| Cadence | Illustrative governance activity | Evidence retained |
|---|---|---|
| Ongoing | Case records, vulnerable-customer support, conflicts, incidents and complaints. | Timestamped decisions, rationale, communications and escalations. |
| Monthly | Pipeline, QA trends, complaints, fees, adviser capacity, breaches and financial position. | Defined MI pack, commentary, decisions, owners and deadlines. |
| Quarterly | Compliance monitoring, product distribution, introducers, promotions, outsourcing and resilience. | Test results, exceptions, remediation and closure evidence. |
| Annual | Consumer Duty board report, fit-and-proper assessments, certification, PII renewal, business-plan and risk review. | Approvals, challenge, conclusions and forward actions. |
| Event-driven | Controllers, senior managers, addresses, trading names, incidents, permissions or material model changes. | Impact assessment, approval, notification and implementation record. |
The compliance timetable will differ from one firm to another. It should reflect the firm’s permissions, fee blocks, reporting requirements, SM&CR category, legal structure and the activities it actually carries out. A generic compliance calendar can be a useful starting point, but the final schedule should be tailored to the firm’s specific obligations.
10 · Application quality
What Can Hold Up an FCA Mortgage Broker Application?
| Area to strengthen | Why it matters |
|---|---|
| Business plan tailored to the firm | The plan should clearly reflect the firm’s customers, distribution channels, commercial model and key risks. |
| Policies supported by operating evidence | Policies are stronger when they connect directly to the processes, controls and records used in day-to-day operations. |
| Realistic business volumes | Forecast volumes should align with available adviser, administration and QA capacity. |
| Clear Consumer Duty approach | The application should show how customer outcomes will be monitored, assessed and acted upon in practice. |
| Complete and transparent disclosures | Clear and relevant disclosures support the FCA’s assessment of suitability, honesty and candour. |
| Technology and systems ready for operation | The systems needed to support the proposed activities should be considered and prepared as part of operational readiness. |
| Well-planned AR to DA transition | Early planning helps align contractual arrangements, clients, data, panel access and responsibilities throughout the transition. |
| Capital supported by appropriate liquidity planning | Regulatory capital is one consideration alongside the cash needed to support payroll, timing differences, clawbacks and other operating requirements. |
11 · Quick answers
Frequently asked questions
?How much is the FCA application fee?
Most mortgage-broker applications fall into Category 4, which is £2,820 at the date of this guide. Check the live category against the precise permissions before paying. The figure does not include periodic fees or the wider cost of setting up and running a DA firm.
?How long does direct authorisation take?
The FCA currently says it will usually assess a complete FSMA application within six months. An incomplete one can take up to 12 months. It is measuring against faster proposed targets from January 2026, but the quality and complexity of the individual application will still affect the experience.
?Can we start trading while the FCA application is being assessed?
No. Submitting an application does not itself give the firm permission to carry on regulated activities. The appropriate authorisation or other lawful regulatory arrangement must remain in place until the relevant FCA permissions take effect.
?Does CeMAP make someone directly authorised?
No. CeMAP concerns an individual’s mortgage-advice qualification. Direct authorisation applies to the firm, while relevant Senior Managers may also need separate FCA approval.
?Do we need a compliance consultant?
Not necessarily. The FCA does not require every applicant to appoint one. The firm does, however, need enough experience and independent challenge to design and test the framework properly. A consultant can help, but senior management remains accountable.
?Does authorisation give us lender-panel access?
No. Lenders, mortgage clubs and providers use their own commercial and risk criteria. Panel and agency applications therefore need their own place in the launch plan.
?Should we ask for every possible permission?
No. The permission set should follow the business the firm genuinely plans to conduct. Extra permissions can bring unnecessary obligations, while a missing permission can prevent the firm from operating as intended.
?How can we tell whether the firm is genuinely ready?
Put a realistic sample client through the proposed journey using the people, systems and documents named in the application. Then review the file as a supervisor would. If the firm can explain the advice, the checks, the customer support, the management information and the escalation route without filling gaps from memory, that is a useful sign of readiness.
Primary references
Sources and further reading
- FCA — Apply to become a mortgage broker. Mortgage-broker authorisation route, application expectations and Category 4 fee classification. Last updated 23 July 2026.
- FCA — How to apply for authorisation or registration. Ready, willing and organised standard, Connect, trading restriction and published assessment periods. Last updated 3 March 2026.
- FCA — Move from being an appointed representative to being directly authorised. DA decision factors and transition expectations. Last updated 26 November 2025.
- FCA Handbook — COND: Threshold Conditions. The FCA’s minimum standards and how they apply.
- FCA Handbook — COND 2.7 Business model. Business-model suitability and assessment factors.
- FCA — Senior Managers Regime and SM&CR categorisation for solo-regulated firms. Updated July 2026.
- FCA — Preparing your firm’s financial information. Includes the mortgage-broker financial data template and financial-resource expectations.
- FCA — Supporting material for consumer credit, mortgage and consumer-finance applications. Mortgage forms, documents and policy expectations. Last updated 4 June 2026.
- FCA — Consumer Duty information for firms. Authorisation evidence and Consumer Duty governance expectations.
- FCA — Strategy for mortgage intermediaries. Suitability, QA, incentives, fair value and promotions focus.
- FCA — Authorisation and registration application fees. Category 4 is £2,820; fee is separate from annual fees. Last updated 13 July 2026.
- FCA — Faster targets for authorisations. Proposed four/ten-month targets and measurement from January 2026.
- FCA Handbook — MIPRU 4.2 Capital resources requirements. Activity-specific prudential rules for mortgage and insurance intermediaries.
- FCA Handbook — MIPRU 3.2 Professional indemnity insurance. Policy terms, limits, excesses and additional-capital rules.
- Achos — Product features. Product description used in the Achos perspective panel; not a regulatory source.