Tied Agent

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
Hi

Is anyone out there a 'tied agent' providing advice on and selling finance products of a specific financial institution? If so, how did you set up the arrangement? Who did you approach?

I have a friend/colleague who has developed successful commercial finance brokerage, but wants to diversify a little to be able to offer his clients personal products too. Since commercial finance is not regulated in the same way/as tightly as personal finance establishing a brokerage was reasonably straight forward. However due to the regulation of personal finance, being a tied agent seems the best course of action.

Neil

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Tied Agent

    Has he not had to register with FSA? If he has and got the "number" then he can approach any institution and get a brokerage. If not he may have problems without actually working for a company as an employee. Most financial institutions live in daily fear of the FSA knocking on their doors and imposing fines (they are a self-financing institution) and are very loathe to have "arrangements" such as they used to in the good 'ol days!

    Sorry - dont think i have helped much!

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Tied Agent

    Hi

    At the moment the personal finance 'side of things' is just something that he's investigating, to be able to provide it to commercial clients if needed, as opposed to be a main source of income.

    The commercial finance side of the brokerage is doing well and currently commercial finance (such as commercial mortgages and asset finance) isn’t regulated as tightly as personal finance, though investment business is. Also, acting as a broker is like being a self employed sales person for the company providing the product. Apparently, part of the reasoning for tight regulation around personal finance is to remove as much risk as possible, also 'Joe public' may not be financially aware so needs some protection. Whereas in business, risk (particularly when you’re looking to expand) is part of the equation and supposedly a business person would have reasonable financial awareness (though I think we all know a few who don’t!).

    Neil
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Tied Agent

    Hi there Neil

    My husband used to be a tied agent so I know a little about the subject - whoever your friend wants to work for, I am pretty certain that he will have to register with the FSA. The form is horrific, but as he is involved in the industry he should be able to show that he is a "trustworthy" person. Probably the best way forward is for him to go and talk to a small agency somewhere and ask for advice - or - dare I say it ask the FSA.

    I agree with your comments about removing the risk - for example - you as Jo Public want car insurance - you phone around and take the lowest quote - if you dont like it, next year you change - done! What risk is there in that?
    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Tied Agent

    Hi

    Personally, Im not sure selling personal finance is something I'd want to get really involved in - not so much because of the rules but because I wouldn't want the rsponsibility for someone elses personal money!

    The main issue was to be able to provide a secondary service to his clients for things like stake holder pensions and other 'packaged' products. I think if he wants to branch out in this are he may be best forming a business with someone already approved as an IFA.

    Thanks
    Neil

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