Many property management companies have elected to become an Appointed Representative (AR) of an FCA authorised firm, enabling them to add insurance to their service portfolio.

The decision on whether to offer insurance to your clients and how to do so effectively isn’t one to be taken lightly. Here Mark Savage, Client Services Manager at Deacon, explains why so many managing agents are electing to become Appointed Representatives and why it can be the best answer for leaseholders too.

Property managers wear many hats, from facilities management to health and safety officer, problem solver, and so much more. Residents often assume they will add insurance broking and claims handling to the long list, without appreciating just how much work it involves.  After all, insurance is quite rightly a highly-regulated industry, and as well as being very time consuming it places a lot of responsibility on managing agents.

On the other hand, managing the insurance for properties they manage enables property managers to provide a better and more comprehensive service. Close involvement in buying the policy helps them to understand how pro-active risk management might translate into lower premiums and save the blocks they manage money.

Is it a sound business proposition?

Nevertheless, for a property manager, the decision on whether to handle insurance and how to do so effectively isn’t one to be taken lightly, and it’s certainly not just an easy route to an extra revenue stream.

These days, remuneration through commission is modest. Nevertheless, leaseholders can probably see that this additional income stream for their agents translates into lower fees for them.

However, there is a proviso: service charge payers need to be confident that they are getting the right cover and aren’t being tied to a single provider and a one-size-fits-all policy.

We’d say that on balance it does make sense for a property manager to buy and administer insurance for the blocks they manage, always providing they can make sure the process is streamlined and efficient, and will deliver cover and service that those footing the service charge bills can have complete confidence in.

How regulation works

The Financial Conduct Authority is the financial regulatory body in the UK; it operates independently of the UK Government and is financed by charging fees to its members.

Some property managers tell us that, while they would like to provide clients with insurance cover as part of a complete service, they have been put off by the thought of the workload involved in complying with the requirements of the FCA.  This can seem remarkably complex if it’s not something you are familiar dealing with on a day-to-day basis. As if property managers don’t have enough compliance to deal with already, without adding to the list!

In many cases, the ideal solution for many of these agents is to become an Appointed Representative of an FCA authorised firm known as a Principal.

The Principal then takes responsibility for the property manager’s FCA regulatory compliance on insurance matters.

As an Appointed Representative, property managers are exempt from seeking FCA authorisation in their own right, but they do still appear on the Financial Services Register so their clients are reassured that they are in turn covered by the Financial Ombudsman service and the Financial Services Compensation Scheme.

Alternatives to being an Appointed Representative is to seek full FCA authorisation or become exempt by virtue of RICs registration. Both could potentially be lengthy processes with additional cost implications and requirements for on-going monitoring and reporting.

Alternatively, you could elect to become what is known as an Introducer, whereby a small commission is paid for, literally, enabling the sale of a policy to a new customer.  However, as an Introducer your scope to extend your services to your clients is very limited compared to that of an Appointed Representative.  For example, you cannot help a client to make a claim.  Your support in the event of a claim, is restricted to providing factual information policyholders may request, that will allow them to submit and manage the claim themselves.

Surely all property managers will be ARs?

So why don’t all property managers just become an Appointed Representatives (AR)? 

For a start, the very big property management firms have the resources and volume of insurance business – buying cover and handling high volumes of claims – that makes it worthwhile becoming FCA authorised in their own right.

Among the medium and smaller firms, not all are ready for the level of commitment required; and Principals do need to be a bit selective. The partnership between a Principal firm. like Deacon, and an Appointed Representative is very much a two-way street. Principals are closely monitored by the FCA at all times and their own reputation could be affected by the action – or lack of action – by an Appointed Representative.  So, they do not make appointments lightly.

Also, a property manager wanting to become an Appointed Representative does have to invest to ensure their systems and staff can meet requirements.  The Principal firm should provide all the documentation and hands-on support they need, but there’s still an initial learning curve.  Get it right at the outset, though, and it should be plain sailing afterwards.

What it means to be an AR in practice

At Deacon, the relationship we forge with our ARs ensures that their clients, landlords and service charge payers are afforded the same levels of service and protection they would experience if they were a direct client of Deacon.

As an AR for Deacon, a managing agent can do everything Deacon does, subject to the terms and conditions of their individual AR agreement; and with someone at our offices on hand to advise at all times.

This does not mean that our ARs abdicate all responsibility to be FCA compliant: they have a firm commitment to work in accordance with their individual Deacon AR agreement. Deacon is part of Gallagher, whose ARs undergo annual monitoring and quality assurance reviews to ensure the highest standards are consistently upheld.

What is an Appointed Representative – in short

An appointed representative is a firm that conducts regulated activities on behalf of a directly FCA-authorised firm. This firm is known as the AR’s ‘Principal’. The Principal firm takes regulatory responsibility for the appointed representative and must ensure it meets FCA requirements. As one of the leading specialist brokers, Deacon ensures that the insured party still gets the benefit of access to the wider market to find an appropriate policy for their specific needs and is assured of a service equal to that of its direct clients.

To find out more about becoming a Deacon Appointed Representative you can download our free fact sheet here or email


The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited trading as Deacon accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.