What is Directly Authorised Broker De-authorisation?
A page on the Financial Conduct Authority’s website talks of reasons why an appointed representative (AR) might decide to become a directly authorised broker.[i] What you will not find there, however, is any information that highlights the factors that could encourage a currently directly authorised broker to de-authorise and become an AR. Many are left in the dark when it comes to directly authorised broker de-authorisation.
That is partly because this journey is a relatively new one. In fact, the Gauntlet Appointed Representative Network pioneered the process, working with the FCA to create a means through which that ‘reverse switch’ could occur.
Why we pioneered directly authorised broker de-authorisation
The reason we did this was because we recognised that the insurance market has become a tough place to be for a smaller directly authorised broker. Insurer expectations, in return for granting an agency to a broker, have grown greatly. The level of premium income now required, in return for a such a privilege, is beyond the capability of many smaller brokers.
As a result, many directly authorised brokers are marginalised within the insurance market. They no longer have access to many of the contacts they once relied upon within the insurance world. They can almost feel ‘ghosted’ by former insurer partners. They are left relying on just a few markets in which to place their clients’ risks, knowing that larger competitors can offer more choice, potentially wider terms and better prices. Gauntlet saw a real need for directly authorised broker de-authorisation, as a lifeline for these talented, under-pressure brokers.
Pressures on a directly authorised broker
In addition, what many directly authorised brokers have to rely upon, to too far a degree, is client loyalty. This is currently being tested to the hilt by the soft insurance market, in which irresistible premium savings can be on offer to clients. Smaller brokers are finding their book of business coming under fire and they have little or no recourse to actions or facilities that can protect it.
Within the market, a directly authorised broker of a certain size has other issues too. The degree of compliance reporting now required of a small broker, who is maybe operating alone or as part of a small or family team, can be a huge weight to bear. Add to this accounting pressures, issues sourcing professional indemnity insurance and difficulties finding the cash for a new IT contract, and there are many worries to keep brokers awake at night.
Exit routes for directly authorised brokers
Then there are concerns about a future exit plan. Smaller brokers do not meet the premium income threshold that satisfies the industry acquisitors. A directly authorised broker like this can now feel stranded in the market, with no choice, seemingly, other than to just close the office door and walk away. Finding an insurance brokerage buyer seems an impossible dream.
If they do decide to pack it all in, perhaps because they want to start winding down, have a much-needed holiday or take time out for health reasons, they can find life far less enjoyable. Many of their social interactions are based on their broking lives. If their business closes, so too do many of their social opportunities.
Our solution for directly authorised broker de-authorisation
All of these factors compelled the Gauntlet Appointed Representative Network to create the means to enable directly authorised brokers to come back across the bridge and become an appointed representative. By bringing them into our fold, we knew that we could resolve many of their issues. As importantly, we recognised that we could keep these valuable insurance professionals within the insurance market. With our support, they could continue to serve their communities and offer excellent advice to their clients. Competition in the insurance market depends on retaining these professionals on the broking map. We were determined to do so, by pioneering Gauntlet De-authorisation Fast-track (GDF) – our solution for directly authorised broker de-authorisation.
The results of Gauntlet De-authorisation Fast-track
Our vision has proved to be correct. We have now assisted a significant number of directly authorised brokers who had reached the end of their tether in their business. They needed to be re-motivated and given a new lease of life, which could only come through support and market access. By providing them with this, plus higher commission rates and first-class IT and sales mentoring, we have set them off on a much more rewarding path. It has, in all cases thus far, also been more financially rewarding for these individuals. This is despite them now sharing commission with Gauntlet Group.
Freeing up these individuals to sell and liaise with clients, as well as giving them a feeling of empowerment to go out and place business, has been truly inspiring for us as an appointed representative principal. Seeing happiness return to their lives has been a real joy for us too.
A built-in exit route for formerly directly authorised brokers
Furthermore, we have now reached the stage, after just a few years of working with some of these individuals, where we are now helping them plan their retirement. By transferring clients into Gauntlet, either in a staggered or one-off process, they can walk away from their brokerage having achieved a sale of their book that they had felt unachievable.
Whether it is to lower stress levels, feel remotivated at work, find access to market, have the ability to take time out, or to leverage an exit route, there are many reasons to consider de-authorising, if you are a directly authorised broker. Switching status from directly authorised broker to appointed representative can be a liberating and rejuvenating process – one through which we will guide you, to ensure all is done in an orderly fashion and in a way that addressed the regulator’s concerns. Our formerly directly authorised brokers are always happy to talk about how this works, if you want to find out more.
To do that and discover what switching your status from directly authorised broker to AR could do for you, please call Nigel Law on 07774 690436, or email NigelLaw@GauntletGroup.com
Photo by Photo by Vitaly Gariev on Unsplash
Additional resources
To discover more about directly authorised broker de-authorisation, read our collateral here:
https://appointedrepresentatives.com/wp-content/uploads/2023/06/Gauntlet-Ghost-in-the-Machine.pdf
https://appointedrepresentatives.com/wp-content/uploads/2025/10/Gauntlet-GDF-booklet-2025.pdf
You can also listen to podcasts with former directly authorised brokers, and episodes that discuss directly authorised broker de-authorisation, here:
Reborn as a Broker – https://bit.ly/3E5rFcE
Insurance Broker De-authorisation: the Advantages & the Opportunities – https://bit.ly/4hqPLBe
Gauntlet Risk Management Ltd is authorised and regulated by the Financial Conduct Authority (FCA) under firm reference number 308081. You may check this on the Financial Services Register by visiting the FCA website, www.fca.gov.uk/register/ or my contacting the FCA on 0800 111 676. Registered Office: Gauntlet House, 15 Acorn Business Park, Killingbeck Drive, Leeds, LS14 6UF. Company Registration No 03726095.
[i] https://www.fca.org.uk/firms/principals-appointed-representatives/move-to-authorised