Brokers struggle to gain FCA approval

A large majority of asset finance brokers say that they have found it difficult to gain authorisation from the Financial Conduct Authority (FCA).

Four out of five brokers working in the asset finance sector have found the process of becoming fully FCA authorised difficult, according to new research out United Trust Bank.

More than half of finance brokers who took part in the survey said that they had expected it to be difficult and they found that to be the case.

But a further 25% found the process to be more difficult than they had expected. 

Around three quarters of brokers are now on course to being fully approved but worryingly, 16% are not sure what their situation is and 9% say they are not on course for authorisation.

The research also revealed that over three quarters intend to stay independent. 16% said that they have already joined a larger broker group and 8% are considering the move.

Although not a single broker indicated that they were considering leaving the asset finance industry.

Martin Nixon, head of asset finance at United Trust Bank, said: “We thought that there would be a lot of work involved for brokers to get fully FCA authorised and this research confirms that some brokers may have underestimated what needed to be done.

“The good news is that three quarters are on course to being fully authorised.

“It is somewhat concerning, however, that one in five brokers are still either considering not applying for full authorisation or are as yet undecided. The clock is ticking!”

The research also revealed that the authorisation process has persuaded some brokers to give up their independence and join larger broker groups.

Loss of independence and sharing of commission was balanced against the assistance with authorisation and access to a larger funding panel.

Nixon said: “Overall, the survey demonstrates that brokers have proved their resilience and adaptability to the challenges put before them and the industry as a whole can move forward with renewed confidence.”