Melanie Spencer is head of MCI Mortgage Club

Most of the mortgage brokers I meet really enjoy their job, but sometimes they ponder if they’re working in the right model.

By that I mean, should they be an appointed representative (AR) of a network, or directly authorised (DA) by the Financial Conduct Authority (FCA)? There are important distinctions between the two, and they both have their pros and cons, but it is important for brokers to decide which is the best route for them personally to go down.

Many brokers start their careers as ARs, where they can concentrate on being advisers with much of the back office work undertaken by the network they are attached to. They have the support of the network taking care of things such as IT, compliance and regulation but there may be restrictions on which lenders they can use.


Being directly authorised means you can run your own business in the way you want to without the confines of being part of a larger firm. But it also means you must take care of compliance and regulation, IT, marketing, professional indemnity insurance and all other aspects of business.

DA brokers don’t have to completely go it alone as they can get assistance by being part of a mortgage club. The club can help brokers with many of the things a network provides via partnerships with experts who can help with compliance and business support.

As we like to say at MCI, a mortgage club provides brokers with the security of a network but also the freedom of being directly authorised.

Some brokers might find it daunting to move from being an AR to a DA but a mortgage club that offers compliance advice can also help with the FCA application process if need be.

A huge part of a broker’s infrastructure is IT which can be a minefield as to what systems to choose. IT plays a huge role in our business as our sister company eKeeper provides a flexible mortgage customer relationship management (CRM) system, which can be used by any broker, not just MCI members.

Mortgage clubs can also offer brokers access to a wide range of lenders, insurers and some provide panels of conveyancers and surveyors too.

Moving from AR to DA

If any brokers are considering moving from AR to DA, they must inform their network and the FCA will need to contact them for a reference.

When the AR leaves, any regulated business written will be the responsibility of the network. So the broker will have to make arrangements for the network to have direct access to client files in case there are any complaints.

Naturally, brokers will want to bring their existing clients with them but they must check that the agreement with the network allows them to do this.

If brokers want control over their business with as much or as a little outside assistance as they require, the DA route could be the best option. Many of our members are sole providers or small firms of less than five people but we also have some much larger firms.

There is no size requirement – it really just boils down to what works best for each broker.