Does AR oversight cover financial promotions and fitness checks?

An appointed representative carries on regulated activity under the responsibility of an authorised firm, its principal. The FCA's guidance for principals, updated on 9 November 2026, says the principal "is responsible for making sure the AR is fit and proper and complies with our rules".

The duties are wider than file review. Principals must assess an AR before appointing it, review its activities, business and senior management regularly, take reasonable steps to keep it within the scope of its appointment, and make sure it continues to meet standards such as the Consumer Duty. SUP 12.6.7G puts the responsibility for controlling and monitoring AR activities with the principal's senior management.

The rules also set the review cycle. Principals must review each AR at least every 12 months, keep a written record of each review, and prepare an annual self-assessment that the governing body signs off.

Fit and proper checks are not only an onboarding step. The FCA lists three things each annual review must cover:

• the fitness and propriety of senior management at the AR, and their competence
• the AR's financial position
• the adequacy of the principal's controls and resources to oversee the AR

Some events call for an extra review between annual ones, for example when an AR changes its business model or the regulated activities it carries on, or is appointed by another principal. The FCA also gives "unusually high rates of senior management turnover" that an AR cannot explain as a reason that may justify termination.

For a network, that means a fitness and propriety record for each AR's senior managers that is refreshed every year, not a file of onboarding checks from the year the firm joined.

Mortgage networks have a specific hook. SUP 12.6.1B says a principal of an AR carrying on MCD credit intermediation activity "must monitor the activities of that appointed representative to ensure compliance with obligations derived from the MCD (including those in MCOB and TC)".

MCOB 3A sets the rules for mortgage communications and promotions. A firm communicating or approving a promotion for an MCD regulated mortgage contract must ensure it is fair, clear and not misleading and does not create false expectations about the availability or cost of credit.

So when an AR runs its own website, social media accounts or local advertising, those promotions fall within what the principal monitors. The FCA's own good practice examples include "reviewing all new financial promotions upon publication to ensure compliance" and setting up alerts for changes to AR websites.

The FCA tested how around 270 principal firms, about 10% of all principals, were applying the new rules, and published its findings on 6 September 2024.

Confidence ran ahead of evidence. 96% of principals said they were very confident they were implementing the new rules effectively, yet one in five had not done the required self-assessments or annual reviews. In the in-depth sample of 23 firms, 82% had completed annual reviews, and 43% of those were of good quality.

Consumer-facing material was the clearest gap. Less than a third of principals said they checked websites, social media or leaflets. The FCA lists "not checking consumer-facing materials" as an area for improvement, alongside file reviews that are "unrecorded and largely informal".

The FCA also criticised annual reviews built on "a website check on the AR and looking through an AR declaration". It says it is "the principal's, not the AR's, responsibility to carry out the annual review".

The FCA's good practice examples describe one connected record, not separate checks run by separate teams:

• quality assurance checks on AR client files, feeding into the annual review
• proactive monitoring of websites, marketing material and public reviews, with any follow-up documented
• quarterly and ad hoc checks that feed into the annual review
• fitness and propriety of AR senior management, reviewed each year and after changes
• a standing board agenda item on ARs, with minutes and actions

A network that checks advice files thoroughly but holds its promotions reviews in one inbox and its fitness and propriety records in another will find it hard to show its governing body one picture of each AR.

1. For each AR, when did we last review the fitness and propriety of its senior management, and where is the record?
2. Do we see every financial promotion an AR publishes, including social media, or only the ones it sends us?
3. Do our annual reviews draw on our own file checks and monitoring, or mostly on the AR's own declaration?
4. Which events trigger an extra review, and can we show when one happened?
5. Does our self-assessment use MI across files, promotions, complaints and senior management changes?

Curvestone's AR Oversight builds one view of each firm and adviser from the files, promotions, calls and public record a network already holds, including fit and proper evidence. These questions are a fair test for any approach, ours included.