The DR to AR Switch

TEn believes that many Directly Regulated (DR) Brokers, up to and above £5m GWP, would be better served in most respects as an AR of TEn. Compared to remaining as they are and, whether or not they are already members of a DR network.

Nevertheless, simply because we believe it and we believe we can make a good case, it does not necessarily mean that every Broker of that approximate size, will feel comfortable with the concept of AR status. For many reasons the proposition can appear quite daunting.


Possibly because there is more than a small element of trust involved.


Conversely, many of the start-up Brokers that TEn has fostered as ARs, are just as bemused that so few established Brokers of their own size or smaller, have ever made the switch.

Of course, the lack of converts from DR to AR status - arguably only two since 2005 - is perhaps because, neither TEn nor any of our emulators, have successfully put forward a clear and compelling proposition.

The Rationale

In Australia, where the distinction between AR and DR (Licenced) brokers has existed rather longer than it has in the UK. There are not only many more AR networks, but it is generally accepted that brokers below a certain size are now ARs.


So, why not here in the UK then?


In respect of UK General Insurance, AR status is still a relatively new thing. Also, it is unfortunate that people who sell leather sofas have also been allowed to sell Insurance, generally under the umbrella of being an AR. Therefore, the same regulatory status covering a professional Broker of comprising of 2 ACIIs, 1 DIP and 3 CERTs, can equally apply to somebody with a shiny suit, colourful socks and some form of Protection Insurance.

Ideally, the FCA should make a distinction in description between these two groups and, thus, go a long way towards removing the stigma surrounding the term AR. However, this is unlikely.

Indeed, it used to be the same in Australia, with AR status regarded as somehow secondary, but they got over it.


Of course, your average Aussie bloke has a multiplicity of stigmas to overcome…


…and, consequently, he is better practiced at dealing with them.

The independence issue

According to Jean-Jacques Rousseau,


“Man is born free but everywhere he is in chains.”


This is never truer than when applied to the small DR broker in the UK provincial market. Whilst one can only respect their perception of their own independence, in reality, it is often illusory.

If they are a member of a network, then it is often ultimately owned by a large Private Equity firm. If they are not a member of a DR network, then, alas, most composite insurers struggle to justify spending time with them.

Detractors of the AR model will say that ARs have less freedom in terms of where their business is placed. Not true; quite the reverse in fact. TEn holds over 250 TOBAs with Insurers, be they large and generalised, or small and specialist.


We encourage the use of Preferred Markets, but we do not mandate it.


The only constraints would be the acceptability of a market to our Security Committee and provided the cover offered meets the client’s needs.

TEn is Employee Owned and beholden to nobody; we have no conflicts of interest and no consequent constraints. For our ARs, we facilitate a wider choice than they could possibly achieve for their clients as small DR brokers and, at the same time, they enjoy freedom from unproductive distractions that beset every small Broker in the country.


Genuine independence and freedom are a consequence of a life without constraints.


The tangible AR savings

  • Staff salaries, NI, Pensions etc.
  • Office space to accommodate staff
  • Other HR costs, including recruitment, training etc.
  • MISC. staff costs, tea/coffee, Xmas party etc.
  • Office space, utilities, heat, light, rates etc.
  • PI Insurance costs, other than Excess protection
  • FCA, FOS & FSCS fees (insurance)
  • FCA, FOS &FSCS fees (consumer credit)
  • Compliance Consultants
  • IT infrastructure and broking system costs, per staff member
  • Telephony costs, per staff member
  • Bank charges, per account and per transaction
  • Auditors, extra cost for DR brokers
  • BIBA membership cost, included with TEn

The intangible AR savings

  • Client facing time
  • Management time
  • Work/life balance

But, people will do what they feel comfortable with, unless they first acquire an Aussie accent.


Site map coming fairly soon...

...by December probably.

The site map will be an aid to navigation around our various websites. Of course, these sites have just undergone a major structural update and things are still changing.

So, it’s a bit like when a supermarket periodically shifts things around, either, just for the hell of it, or, because they have decided to squeeze in a click & collect point, where the bread used to be.

As stuff relocates, consequently, leaving the signs above the ends of the aisles as they were before, could become confusing.

Our current situation here is very similar.

Mind you, whether before or after the reorganisation, you can never find the Tahini paste. You always have to ask.