How to become a credit broker

Credit broking is a regulated activity, so becoming a credit broker means obtaining FCA authorisation before you start. Beyond industry knowledge, that requires a business plan the regulator can assess, a complete set of policies, and the capacity to answer the FCA’s questions quickly. Three things account for most of the difference between a smooth application and a slow one.

Develop a business plan with compliance built in

The FCA expects brokers to demonstrate a clear understanding of their own business model and the obligations that attach to it. Before applying, be able to articulate:

• the services you will provide and the customers you will provide them to
• your approach to compliance and risk management
• how you will meet ongoing regulatory requirements once authorised

The regulatory business plan is not a commercial pitch. It should show how the firm will operate inside the regulatory framework, and it needs to be consistent with the conduct standards in CONC (opens handbook.fca.org.uk in a new tab) and with the Consumer Duty in PRIN 2A (opens handbook.fca.org.uk in a new tab).

Prepare the policies and procedures in advance

A large part of the application is documentation showing how the firm will operate compliantly. Expect to need, at minimum:

• customer treatment and fair outcomes policies
• anti-money laundering and financial crime procedures, meeting the Money Laundering Regulations 2017 (opens legislation.gov.uk in a new tab)
• complaints handling processes consistent with DISP (opens handbook.fca.org.uk in a new tab)
• data protection and UK GDPR compliance

The FCA asks for these upfront. Producing them after submission is what turns a six-month determination into a longer one.

Be responsive to FCA requests

After submission, the FCA will ask for clarification on policies, procedures or the business model. These requests carry deadlines - often one to two weeks.

• keep the underlying documentation accessible rather than scattered
• respond inside the window given
• make sure answers are consistent with what was already submitted

Slow or inconsistent responses are among the most avoidable causes of delay.

What happens after authorisation

Authorisation is the entry point, not the finish. A broker carries continuing obligations: ongoing conduct standards, annual reporting, fee payments, and the requirement to keep operating as the business plan described.

If you are still working out which permission applies to your firm, start with do I need FCA authorisation - credit broking as a secondary activity and credit broking as a primary business lead to different applications.