Regulatory Business Plan
ABC Example Co Ltd
ABC Example Co Ltd is an online lead generator. We operate primarily through our website example.com. We connect borrower with prospective brokers and lenders for the purpose of obtaining short-term loans. We do not charge customers any fees for using our services. Our revenue comes from the commission paid by the lenders or other brokers to whom generated leads are referred.
We wish to carry on regulated activities because we would like to work directly with lenders rather than sending our leads to brokers. We would like to be a directly authorised loan broker in addition to being a lead generator.
We already have a proven method of obtaining leads that we can use to build our own customer base. Currently, most of our leads come from online searches and we utilize various Search Engine Optimisation techniques to improve the rankings of our website. Our strategy for expansion is to obtain a direct authorisation to be a loan broker.
The market that we operate in is very competitive and the promotions we use are the lowest possible rates offered by brokers and lenders who always have to maintain rates low enough to attract new customers. Currently, we do not transact any direct business with end-customers. Brokers and lenders that pay us commission for generated leads can be considered our existing customers.
The brokers and lenders that we work with offer various types of personal loans, payday loans, unsecured or secured loans, loans for customers with bad credit, debt consolidation loans, car loans, holiday or wedding loans. These are the products that we specialise in.
The people in senior management positions have many years experience in the consumer loan marketing industry, including various aspects of it such as building software and websites, SEO and marketing, dealing with brokers and lenders, selecting and marketing compelling offers that consumers want and in a way that customers find easy to use and understand.
By dealing with brokers and lenders and being in the industry for a significant time, the senior management has learned about the required procedures in our regulated industry and how to perform significant influence controlled functions.
In a very competitive market where we operate, we have to do a significant amount of background work to find the best brokers and lenders to work with that offer the lowest rates and the best terms and conditions for our customers. Shopping and comparing rates online is very easy for consumers and if our rates are higher that those of competitors, prospective customers will leave us to go to another website with a simple click. This is what motivates us to find the most affordable rates and the highly suitable products for our customers.
We will not be broking high-cost short-term loans.
FCA Guidelines for a Regulatory Business Plan
You must confirm you have available a regulatory business plan. It is important that this is tailored to the Applicant firm’s business, otherwise it may lead to delays. As a guide, the business plan should include:
- the background to the business;
- why the Applicant firm wishes to carry on regulated activities at this time;
- whether the Applicant firm has identified a particular business opportunity or identified a specific customer base;
- any long-term strategy and expansion plans for the business generally;
- where customers will be sourced from (e.g. existing client base or purchase of client bank) including the use of any lead generators or brokers;
- the Applicant firm’s plans in relation to financial promotions and communications;
- current business lines being transacted with any existing clients;
- the types of products or credit a lender or broker offers and the types of services or debt solutions that a debt manager offers and any other services (both regulated and non-regulated) that the Applicant firm will be selling. You should identify the areas that the Applicant firm may specialise in;
- what experience the governing body or senior management of the Applicant firm have of the type of regulated activities the Applicant firm wishes to carry on;
- the background and experience of all the persons performing significant influence controlled functions and how this will help them with their role. This should include employment background. You must enclose copies of any relevant qualifications or examinations; and
- details of all fees that could be payable by the customer and how they are explained to the customer.
- full details of the Applicant’s procedures to assess the affordability of the credit and that the product is not unsuitable for the customer. This should include details of how the Applicant will assist customers to shop around for credit.
- Whether the applicant will be broking any high-cost short-term loans and if so details of how the applicant will ensure that it does not enter into any agreements for high-cost short-term credit which would exceed the cost cap for high-cost short-term lending (see CONC 5A.2).
Counselling, Adjusting and Credit Information:
- full details of the Applicants plans to promote their debt management activities or other services. Please include copies of any drafts you may have; and
- full details of the Applicants debt counselling process and copies of the documents you will provide to the customers.
Firms which are intending to be a principal:
- full details of the Applicants plans relating to appointed representatives, including how these will be recruited, the initial an ongoing assessment of these, the staff to carry this out, the fees to be charged to the appointed representatives and the numbers and geographical spread of the appointed representatives.