Applying for FCA authorisation under Part 4A FSMA is one of the most significant steps a financial services firm can take. Yet despite the abundance of guidance available, many applications stall because firms underestimate the preparation involved or misunderstand the FCA’s expectations.

On 11 September 2025, the FCA published new observations on good and bad practices it has seen in authorisation and registration applications. These examples confirm what we frequently encounter in our consultancy work: the firms that succeed are those that prepare strategically, take ownership of the process, and can demonstrate they are “ready, willing and organised.”

At Compliance Angle, we help firms navigate the authorisation process with confidence. Below, we combine the FCA’s latest observations with our own insights, setting out the practical steps and pitfalls that applicants should be aware of.

Strategy Comes Before Forms

The FCA noted that some firms struggle because their policies and documents look generic or disconnected. In particular, they highlighted policies that simply repeat the FCA’s rules without showing how they will apply in practice.

Our take: This problem usually starts before the application is even drafted. Firms rush to complete forms before resolving strategic questions such as:

  • What client need are you addressing, and with which products?
  • How will you create and prove fair value for those customers?
  • What prudential requirements apply, and how will you meet them?
  • How will governance and oversight actually work day to day?

By answering these questions early and embedding them into policies, firms avoid the trap of boilerplate documents and instead present a coherent, credible application.

Be Organised for Day One

The FCA reinforced its long-standing expectation that applicants must be ready, willing and organised. In practice, this means more than having paperwork in order.

The FCA described good practice as firms providing:

  • Clear ownership and governance charts.
  • Skills gap analyses with recruitment or training plans.
  • Realistic project timelines for IT and operational build.

Bad practice included vague information about IT systems, policies that don’t “join up,” and weak evidence of UK presence.

Our take: The FCA does not expect every role to be filled or every system to be live at authorisation. But they do expect a credible, resourced plan showing how you will launch and deliver compliant operations. A well-structured implementation roadmap is one of the strongest signals of “organised.”

Dialogue With The FCA Matters

The FCA made clear that iterative engagement is normal. They expect firms to respond quickly and thoroughly to requests for clarification, whether on business plans, wind-down scenarios, or customer outcome considerations.

Our take: Successful firms manage this process proactively by:

  • Setting internal expectations that questions are part of the journey.
  • Assigning resource to provide quality responses on time.
  • Demonstrating transparency and a willingness to adapt where the FCA raises concerns.

What worries the FCA most is resistance or inconsistency in responses, both of which signal a lack of “willingness.”

Dialogue With The FCA Matters

The FCA’s September guidance criticised firms that over-rely on compliance consultants and cannot demonstrate they understand their obligations. They also flagged the issue of senior staff being overstretched and unable to explain how they will divide their responsibilities.

Our take: External advisers should strengthen an application, not substitute for internal accountability. That means:

  • Appointing a senior accountable executive to own the process.
  • Ensuring the Board and ExCo are actively engaged.
  • Being prepared for FCA interviews and scrutiny, without leaning solely on advisers.

The FCA wants to see that leadership can stand behind the submission and operate the business sustainably.

Common Pitfalls To Avoid

Drawing both on the FCA’s September observations and our own experience, the most frequent causes of delay are:

  • Policies that look templated, not tailored.
  • Unclear or unrealistic governance arrangements.
  • Weak demonstration of UK-based operations.
  • Missing or inaccurate financial information.
  • A focus on risks to the firm rather than risks to customers.

By contrast, firms that succeed tend to show:

  • Suitability assessments of Approved Persons or SMFs.
  • Detailed financial assumptions and funding evidence.
  • Consumer Duty embedded across systems and controls.
  • Coherent policies that “join the dots” across governance, risk and operations.

Final Thoughts

The FCA’s September 2025 review confirms that authorisation is not just about filling in forms, it is about demonstrating a credible, well-resourced business model that can operate compliantly from day one.

At Compliance Angle, we support firms across sectors in preparing for this milestone. From readiness reviews and business plan design to drafting applications and managing FCA engagement, we combine regulatory expertise with practical insight into what works in practice.

If your firm is considering an application, we would be delighted to help you prepare, and ensure your submission reflects not only FCA expectations, but also your own long-term success.

Contact us and schedule a free consultation to find out how Compliance Angle can help you stay on track and ahead of the game.

Call us on +44 7427792594 or send us an email at info@complianceangle.co.uk 

This article originally featured on Compliance Angle | Source