Network or Direct Authorisation: Which Structure Is Right for a Mortgage Adviser?
Choosing how to structure your mortgage advice business is not a decision most advisers take lightly. Whether to become directly authorised or to operate as an appointed representative within a network affects accountability, infrastructure and the way compliance is managed day to day.
Both models sit within the same Financial Conduct Authority regulatory framework. The difference lies in where responsibility rests and how that responsibility is supported.
What Does It Mean to Be Directly Authorised?
Direct authorisation places your firm fully in control. You hold your own permissions with the Financial Conduct Authority. You design the compliance framework. You determine how governance operates, how oversight is evidenced and how regulatory change is implemented. The structure is yours to build and yours to maintain.
That level of autonomy can be commercially attractive. Systems can be tailored precisely to your business model, reporting lines can remain lean and strategic decisions sit entirely within your control.
But independence carries weight.
Regulatory reporting, complaints handling, training and competence oversight, file monitoring and risk management must all be documented and reviewed internally. As the regulatory landscape evolves, your firm must interpret change, update procedures and ensure staff remain aligned. Direct authorisation therefore demands not only technical competence, but sustained governance discipline and sufficient resource to maintain it year after year.
How Does the Appointed Representative Model Work?
The appointed representative model shifts that structural dynamic.
Rather than holding permissions yourself, you operate under the permissions of a principal firm. The principal is accountable to the regulator for the regulated activities undertaken by its appointed representatives and establishes the supervisory framework within which those activities are carried out.
In practical terms, this means compliance infrastructure already exists. Policies, monitoring processes and governance standards are defined at principal level. Advisers operate within that framework instead of constructing one independently.
What does not change is professional responsibility. The quality of advice, the suitability of recommendations and the clarity of documentation remain firmly with the adviser. The difference lies in where regulatory accountability formally rests and how compliance oversight is structured around the business.
For some mortgage advisers, that defined environment provides clarity. For others, autonomy remains the priority. The distinction is structural rather than professional.
How Does the Appointed Representative Model Work?
Instead of holding your own permissions, you carry out regulated activity under the permissions of a principal firm. That principal is accountable to the regulator for the activities of its appointed representatives and establishes the supervisory and compliance framework within which advisers operate.
In practice, this means oversight, governance standards and structured monitoring sit within the principal’s environment. Advisers work within an established framework rather than building one independently.
Professional responsibility, however, does not shift. Advisers remain responsible for delivering suitable advice, maintaining clear documentation and acting in the best interests of their clients. The distinction lies in regulatory accountability and how compliance infrastructure is structured around the adviser’s business.
Where Does Regulatory Responsibility Sit in Each Model?
With direct authorisation, accountability rests entirely with your firm. You must demonstrate that appropriate systems and controls are in place and functioning effectively.
Within a network, the principal firm carries regulatory accountability. Oversight, monitoring and structured supervision form part of the framework under which advisers operate.
The practical consideration is not which model is simpler, but which model best supports consistent compliance given your resources, experience and growth plans.
What Operational Factors Should Mortgage Advisers Weigh Up?
Beyond regulation, there are commercial and operational realities to consider.
Think about your current position:
Do you have in-house expertise to interpret and implement regulatory change?
Is your compliance monitoring fully documented and consistently applied?
How much time is spent on governance rather than client-facing activity?
Does your infrastructure support planned growth?
Direct authorisation offers independence. A network structure provides an established framework. Each comes with different demands on time, resources and oversight.
There is no universal answer, only alignment with your own objectives and capacity.
How Should Mortgage Advisers Approach the Decision?
It can be helpful to step back from the labels and focus on outcomes.
What environment allows you to deliver suitable advice consistently?
Where will you feel most confident in evidencing compliance?
Which structure supports the long-term direction of your business?
Some advisers prefer the autonomy and direct accountability of holding their own permissions. Others value operating within a principal-led structure that provides defined systems and oversight.
If you are reviewing whether appointed representative status within In Partnership may be appropriate, an initial discussion can help clarify how your current structure compares with our model. Any potential appointment would be subject to due diligence and regulatory approval where required.
Ultimately, the right choice is the one that supports strong governance, clear accountability and consistent client outcomes over time.