Advisers hit out at 'tax on success'
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Advisers have branded the FSA’s move to use firms’ income to calculate regulatory fees a “tax on success”.
Thameside Wealth director Tom Kean says: “There may be a kind of twisted logic in charging firms more who write more business but it seems like a tax on success. The higher producers will shout it is not fair but the lower-producing firms will probably keep their heads down and say nothing.”
Philip J Milton & Company managing director Philip Milton says: “It seems inappropriate and unfair. Why should it be based on revenue? It should be based on the regulatory input involved for that particular firm. Under this scenario, you could have a network that sees its fees fall but the regulatory involvement could be quite significant.”
Evolve Financial Planning director James Norton says: “To some degree, it is reasonable because the larger the level of income potentially the greater the level of risk, but the FSA needs to do something to compensate lower-risk firms. I do not think the FSA wants to necessarily increase the burden on ’good firms’, however, as it stands, the wrong people will end up paying.”
An FSA spokesman says: “Many of our fees are already based on income, which is a better indicator of scale of business and risk than headcount.”
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