FSA stands by forecast of higher costs for fee-based firms
Share
The regulator has stood by its prediction that fee-based firms will be hit by higher RDR compliance costs, as they typically pay higher salaries, making additional man-hours more valuable.
The RDR policy statement, addresses concerns from some respondents over the June RDR consultation paper that the FSA’s estimates are flawed. In some cost categories, such as system changes and changes to marketing and disclosure documents, the FSA estimated higher costs for fee-based firms than for commission-based advisers.
The FSA says: “Some fee-based firms may not be fully compliant with RDR proposals and because these firms tend to pay higher salaries, the costs of making these changes may be higher than those for commission-based firms, where they require additional man-hours to implement the changes.”
Evolve Financial Planning director Jason Witcombe says: “It is a concern that fee-based firms that pay salaries to advisers will be hit by higher RDR compliance costs, as well as greater capital adequacy costs. It is a shame to think firms may be disincentivised from paying advisers salaries.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
