REGULATORY PATHFINDER · MARKET ENTRY
Both can provide a route into regulated investment services. The difference goes beyond launch timing: it shapes accountability, product freedom and who actually runs the business.
START WITH THE ACTIVITY
A financial product, app and customer journey can involve very different regulated activities. General information, personal recommendations, arranging investments, execution, portfolio management, payments and crypto-asset services are not interchangeable. Map the actual roles in the customer journey before deciding whether an authorisation or a permitted agent arrangement is available.
HOW IT WORKS
Which services are offered, who speaks to clients and who makes the decisions?
The principal's permissions, processes and oversight must fit the venture.
Under the German WpIG model, the tied agent acts exclusively for the account and under the liability of an investment firm; the firm notifies BaFin beforehand.
The firm must ensure competence and reliability and monitor the activity. Clients must be informed of the agent's status.
Section 3(2) WpIG covers investment brokerage, investment advice and placing for this model. It does not automatically cover independent portfolio management, payment services or crypto-asset services.
THE STRATEGIC CHOICE
| Question | Tied-agent arrangement | Own authorisation |
|---|---|---|
| Market entry | May avoid building a separately licensed firm where the activities and arrangement satisfy the legal conditions. Principal onboarding and approvals still take time. | Authorisation process and own operating organisation; timing depends on completeness, business model and supervision. |
| Product and customer experience | Within the agreed and approved scope; the principal must support products, communications, processes and service providers. | Greater control within the firm's permissions and applicable rules; full responsibility for operations and controls. |
| Governance and liability | The principal is responsible under supervisory law and oversees the agent; the startup's contractual duties and potential liabilities do not simply disappear. | Own management, functions, capital, organisation, reporting and supervisory dialogue. |
| Economics | Assess setup and recurring fees, minimum volumes, revenue sharing, vendor restrictions and exit costs. | Higher setup and fixed costs, with greater control over suppliers and scaling. |
| Scaling | New products, markets or distribution channels often require further review and approval by the principal. | Growth still depends on the licence scope and sufficient resources; changes can have supervisory consequences. |
This is strategic orientation, not a legal assessment of a specific business model.
AN EXAMPLE
A startup displays thematic portfolios and wants to lead users to specific products. Is the content general or personalised? Who advises, brokers or places? In whose name are clients approached, who contracts with them and what data does the principal receive? Those answers can change the available route. A tied-agent arrangement does not resolve the authorisation question for every app feature.
BEFORE CHOOSING A PRINCIPAL
A POSSIBLE PATH
That may work, but there is no automatic licence transfer. A move requires an independent regulatory assessment, authorisation, organisation and orderly treatment of clients, data and contracts. Agree access rights, transition processes and responsibilities from the start. EU and third-country models add home- and host-state rules; a foreign partner does not automatically open distribution in Germany.
See the Pathfinder project phases →3RMCN · NETWORK
Our network includes experienced firms offering tied-agent arrangements. We can help define your requirements and introduce suitable contacts. The parties decide whether to work together after their own assessment.
Ask for an initial discussion →Do you operate a tied-agent network or provide specialist market-entry infrastructure? We welcome new cooperation in Germany, Europe and internationally, subject to a sound business and regulatory fit.
Discuss a partnership with 3RMCN →Reviewed: 29 September 2026. This page primarily addresses German investment services; other sectors and jurisdictions require separate assessment.