What Benefits Does an Insurance Network Principal Offer to an Appointed Representative?

If you are an insurance account executive, good at sales but purely driving money into the pockets of employers, you may well have considered going it alone and setting up your own insurance brokerage.

If that’s the watershed at which you are now at, you have three main options – stick it out with your employer and hope for a rise, set up on your own, or set up in partnership with a ‘principal’ who would be happy to take you on as an Appointed Representative.

If you are not too sure what the terminology ‘Appointed Representative’ means, you should read our blog post ‘What is an Appointed Representative in the Insurance Industry’. If you do know what it means, your main query probably relates to why you should work with a network principal and give them a share of your sales commission.

This is the key point we will answer for you here.

FCA Authorisation

The first thing you need to think about relates to the Financial Conduct Authority (FCA). You cannot provide the regulated activity of selling insurance, unless you comply with its rules and have authorisation to sell insurance. Getting the authorisation can take a new business anything up to a year. That’s a year of sitting around and not being able to trade. If you apply to set up your brokerage as an Appointed Representative, however, you could be trading within weeks, as the FCA will look to your principal to make sure you are complying with all regulations and will already trust your principal to do that. They are not an unknown quantity. You are. This makes entry into self-employment as an Appointed Representative a far more attractive proposition, for many insurance account executives who want to get started quickly.


Even if you go down the route of setting up completely independently and gain your authorisation from the FCA, you would then need to comply with all of their regulations and get your head around what that entails. This could eat into your time considerably – all that precious time that you actually want to be devoting to making sales and earning commission. If you don’t handle the compliance side of things, however, you will be shut down. For many, this makes the fact that a principal will handle all compliance for their ARs a no-brainer. Just make sure that you choose a principal, like Gauntlet, which takes compliance seriously and demonstrates its professionalism through Chartered Insurance Broker status.

Access to Market

You might be the best insurance salesperson in your team, but which insurers would you actually be able to get agencies from, if you set up alone, as a new start-up insurance brokerage? No matter how good you are at selling, you probably won’t be able to make sales if your policies carry uncompetitive premiums and the cover is poor. You may not even be able to place some risks. For this reason, many talented insurance salespeople recognise that it makes sense to become an AR of a principal that has great insurer contacts and access to market. That opens up a world of insurance products for you, letting you sell to your heart’s content and, with Gauntlet Enterprise, if you also want to have broking support, you have your own dedicated AR broker who will help you to place risks.


To compete on a level playing field with other independent brokers and former insurance account executives, all hungry for sales and commission, you need a good IT set-up, ideally one like Gauntlet Enterprise’s, which has in-built CRM capacities, so you can keep on top of your clients, prospects and sales pipeline. Could you really invest in the Acturis system that Gauntlet Appointed Representatives can use for this purpose?

Back Office

When you set up in business, you want to be hitting the ground running, doing what you do best, rather than focusing on things within your non-core competency sphere – like accounting, handling client money, administration and so on. Gauntlet’s Appointed Representatives do not have to wake up worrying about such things, as all is done for them. That’s a major benefit of becoming an Appointed Representative (AR), rather than going it alone.


Setting up a new insurance brokerage is not easy and you can hit obstacles along the way, which can leave you desperate to find yourself a sounding board. But most business advisers do not understand the world of insurance and advice may cost you money. If you join a network like Gauntlet Enterprise, there will always be a mentor who can help you overcome a particular issue or mental block that occurs whilst building your business. At the top, you have Roger Gaunt, who’s actually been in your shoes and knows exactly what it takes.


You may think that the gift of the gab is enough to market your business and that your contact book of clients is sufficient to get you going. Think again. Firstly, you may have restrictions on which clients you can approach. You may also find that some clients are cajoled into staying with your former employer. In the pandemic, you may struggle to get out to networking meetings that could allow you to make new contacts. What you need to be doing is bringing clients into your sales funnel by other means, namely marketing.

But do you have the budget for marketing, as a new start-up business? Can you even afford a decent website? Is social media going to be enough to bring leads in, in the early days? How are you going to tackle the thorny issue of having no marketing budget and no real marketing skills?

The answer is that, if you become a Gauntlet AR, you don’t have to, as there are a variety of marketing assets and services at your disposal when you launch, including a website. That can become your shopfront, if you use it properly and keep it up to date. It will be hosted for a year for you and then you need to take it on board and nurture it. Websites have become key assets for those needing to make sales during Covid-19. You would need one from the get-go.

Commission Share v Start-Up Costs

Nobody likes giving money to others, but that’s what’s asked of you, if you become an Appointed Representative. But instead of looking at it begrudgingly, do the sums. How much would it cost you to lose income for 6 months to a year, whilst you wait for FCA authorisation? How much money would you lose, by not having access to market? What would a compliance officer and an accounts and admin team cost you in wages? Do you really want the burden of even being an employer, given all that has happened in 2020? How much would a website and hosting cost you? What about other marketing costs? And how big a bank loan would you need for a decent, sales-pipeline-handling IT system?

Some ARs at Gauntlet have summed this up as, “Gauntlet Enterprise gives me the service package I simply could not afford to pay for.” Wise words. What it also gives to all, is the backing a trusted brand and a figure of authority in the insurance sector. For this reason, some Gauntlet ARs use Gauntlet in their company name. They don’t have to. They choose to, which says it all.

Nobody will force you to become an AR and none of Gauntlet’s ARs have been forced to join the network. Ultimately, they have all had a wise head on their shoulders and seen the advantages that operating as an Appointed Representative brings to a start-up business and brand-new insurance brokerage.

The fact that some have been with Gauntlet Enterprise for over 10 years and still have not moved to become directly authorised by the FCA, despite being very high-earners and successful brokerages, points to the fact that those benefits are enduring.

If you wish to discuss all of this in confidential mode, with someone who can answer many more questions besides, please contact Nigel Law on NigelLaw@GauntletGroup.com or call 07774 690436.

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