We intend on launching a range of How-To articles to help you understand and resolve your ongoing regulatory compliance matters. Our first instalment is a guide on how to write a regulatory business plan.
What is the business plan?
It is crucial that your business model provides the regulator with clarity on how your firm makes money, and what risks may be prevalent for consumers.
You will need to provide the FCA with a regulatory business plan setting out the rationale for making the application. The FCA is not looking for a lengthy document, generally, an 8-10 page business plan is about the right length. It should cover:
Background information about your firm and the permissions it is seeking to hold;
Information about the services you will provide;
The governance arrangements of your firm;
The fitness and propriety of any other persons applying to hold controlled functions;
Main business risks the firm faces and how these are mitigated;
Compliance monitoring controls;
How does your firm meet the FCA authorisation threshold conditions;
Your growth plans over the next 3 years
Most importantly: Is your business model aligned to the interest of treating customers fairly?
In order to meet the FCA expectations of being ready, willing and organised, you require a detailed business plan. Please note items listed below are not an exhaustive list and there may be additional information that needs to be considered based on your firm type and the permissions you apply for.
In this section, you will need to input as much detail as possible relating to your company, ownership, debts and control structure
In this section, you will need to input information on the key personnel of your firm.This includes detail on each individual’s role and the management responsibilities they
Treating Customers Fairly
You need to explain how you are able to show consistently that fair treatment of customers is at the heart of your business model.
Business Model Overview
You will need to input and provide an in-depth explanation of what your firm does and the activities your firm will be carrying out. This includes what services (both regulated and non-regulated) your firm will provide, as well as the areas your firm, specialises in
and why your firm requires authorisation for the activities it will undertake.
In this section, you should explain your marketing plans, how you will gain customers, your target for customers onboarded over the next 3 years and any financial promotions that your firm may be using or is planning to use.
In this section, you will provide details on the customers' journey from the very beginning of acquisition to the after-sales care process service that your firm provides.
Vulnerable Customer Policy
In this section, you will provide further information about your firm’s Vulnerable Customer
approach. This will need to include how your firm identifies vulnerable customers and what your firm’s process is when dealing with vulnerable customers.
You will need to input information about the compliance structure your firm has in place. This should include what key risks have been identified and how your firm will mitigate these risks and whether your firm has a risk-based compliance monitoring programme
You will need to provide details of your firm’s complaints process. For example:
how your firm will monitor complaints and what will happen when a customer is dissatisfied with your firm's resolution.
In this section, you will need to provide details of the training that is provided to staff. This should include how your firm will ensure staff are sufficiently trained to deliver the requested activities in line with your firm's regulatory requirements.
In this section, you will need to provide details of staff incentives (if applicable), and details on what your firm bases the incentives on, i.e. productivity, quality, compliance caveats, customer feedback, etc.
In this section, you will need to provide details of how your firm will hold sufficient capital to meet its relevant capital resource requirement. This information should corroborate with the financial information provided in the application.
Overview of policies
You will need to provide an overview of the policies and procedures in place,
relevant to your firm's business model.
The first step toward getting your business approved by the FCA is to write a comprehensive business plan. You will need to ensure that all aspects of your business are covered in your plan. We can help you understand what needs to be included in your business plan and assist you in writing a plan that will support your application.
Please note that we cover a lot more detail in our ebook, The Ultimate Guide to becoming Authorised by the FCA, which you can download via our homepage.