Arnold, who left Saatchis late last year and was swiftly replaced by Trefor Thomas, has been planning the agency launch for several months.
Feel will operate from premises in Covent Garden and will offer clients above- and below-the-line services.
Steven Penny, the former managing director of Stretch the Horizon, is thought to be running the agency alongside Arnold.
Feel launches on 4 July and promises to supply "before-the-line ideas bigger than ads". Though Arnold has specialised in direct marketing, he has also created a series of integrated campaigns for clients including The Army.
Arnold, who spent just over 12 months in the integrated role at Saatchis, was previously the creative director at Stretch the Horizon, which has since merged with the sister Mosaic agency ZGC to create Mustard.
Before working at Stretch the Horizon, where he held the creative director role for more than two years, Arnold held a number of positions at above-the-line agencies including McCann-Erickson and Laing Henry. Penny left Stretch the Horizon 18 months ago following the decision to create Mustard.
In addition to his agency roles, Arnold has also served as the chairman of the Direct Marketing Association's creative council. His tenure coincided with a revamp of the DMA/Royal Mail creative awards.
Arnold replaced Gary Sharpen as Saatchis' integrated creative director and reported to its executive creative director, Dave Droga.
Details of Feel's launch clients are unknown. Arnold was unavailable for comment as Campaign went to press.