I’m interested to learn more about the possible risk to the licensee should an corp AR go broke. What happens if clients complain and want their money back as the AR can no long fulfill the obligations clients paid for. Can the client complaint to FOS and make the licensee liable?
By including appropriate provisions reflecting these conditions in their corporate AR agreement, licensees may be able to mitigate their exposure should one of their corporate ARs be at risk of going broke. It is also important that licensees either have professional indemnity insurance that covers their corporate ARs or require their corporate ARs to hold equivalent cover.
RG 104 has more detail on the general obligations of licensees, and RG 166 provides information on financial resource requirements for licensees. RG 126 has more information about insurance requirements.