FT Adviser readers have had plenty to say about the trials of going directly authorised.
Readers cited the growing amount of red tape at the regulator, the Financial Conduct Authority, as well as the increasing cost of compliance, and called it a 'sad' time for clients if more advisers were to choose becoming an AR rather than directly authorised.
The debate came days after many advisers took part in a social media poll over whether they would choose to go directly authorised or become an appointed representative if they had to start over again.
One reader, Harry Katz, took to the FT Adviser comment section to state: "How very sad is this. Poor clients.
"Directly authorised small firms (as opposed to AR and network members) are able to set their own tariff and are therefore invariably more competitive when it comes to charges.
"They are also closer to their clients and generally provide a far better service than the big battalions. Another mark against current regulation."
Referring to the former head of Fimbra, which was wound down in 1997, Katz also commented: "Come back Godfrey Jillings."
Another adviser claimed the regulatory environment was "truly appalling when I applied to be DA a few years ago".
He said it seemed the regulator "dragged their feet on everything and my application was simple.
"I had 30 years experience, (including management and compliance), chartered, no complaints, easily met the capital requirements and my current employer was retiring and selling his clients to another firm and I was keeping my clients.
"It took 12 months and was so stressful."
Another said it was so difficult for one-person firms to get authorised, and also pointed at the lack of a strong professional body set up specifically to regulate the advice profession.
The comments came in response to a report from FT Adviser on the length of time it was taking for firms to go DA, following a poll by marketing consultant Phil Bray.
As reported, Phil Billingham, partner and chartered wealth manager at Perceptive Planning, said he was working with some advisers who have found getting direct authorisation from the Financial Conduct Authority has been taking months longer than they had anticipated.
"It is a much more difficult and longer process than people are giving it credit for," he said. "They expect to DA in three months and that is unrealistic. It is more like 12 months from start to finish."
Billingham told FT Adviser he had been speaking to companies that are finding the whole process more difficult and onerous now than at any time within the past 20 years.
This is why more young advisers and newcomers have decided to go down the AR route, rather than set up new businesses in their local areas.
Regulatory necessity
FT Adviser referred to a 2021 letter from Sheldon Mills, executive director of consumers and competition at the FCA, in which he wrote: "During authorisation, we assess a variety of factors to ensure our minimum requirements are met, including whether a firm has adequate financial resources for the regulated activities it wants to provide.
