FSA to lower minimum fee for IFAs by 45%
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The FSA has today proposed changes to the structure of fees for regulated firms which will lower minimum annual fees for IFAs by more than 45 per cent.
The regulator plans to reduce the minimum fee for advisers from £1,850 to approximately £1,000, which is a cut of 45.9 per cent.
An FSA spokeswoman says the exact minimum fee will be calculated when the regulator consults in February on the 2010/11 levies, but based on this years’ figures would be £1,000.
It is also proposing cuts to the variable fee, which it estimates will result in lower costs for 56 per cent of firms and increased fees for only 1 per cent.
Variable fee calculations are currently based on the size of the firm in terms of the number of approved persons, but the FSA will consult on whether this should be changed to income.
The FSA is also consulting on easing costs for firms offering more than one area of business. Firms operating across two fee blocks who now pay 100 per cent of the fee for the main block and 50 per cent for the second, may also only have to pay for the main area of business.
The FSA says it will publish a fees calculator by the end of November which will enable firms to assess what these proposals mean for them.
FSA’s chief operating officer Mark Norris says: “We are committed to delivering fair and transparent fees to all authorised firms. This is particularly important given that we are funded entirely by the firms we regulate, so we need to ensure firms can clearly see how we calculate their contribution to the running costs of the FSA.”
The FSA is inviting responses to the proposals in its consultation paper by January 11, 2010.
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Readers' comments (13)
Paul Waldron | 10 Nov 2009 5:13 pm
About time too!! It is about time our regulators did something to help small IFA firms out during these times. Maybe they should relax on a few
more issues regarding information required for reporting etc..??
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Peter Herd | 10 Nov 2009 5:30 pm
It is about time that the regulator did something to stimulate the IFA market. As we live in a time when billions are being thrown at our banks with little or no support to the IFA market. The government continues to say that it needs more IFA giving quality financial advice but does little to support industry. So the reduction of fees is welcome but surely we can also look at some of the other more contentious areas like RDR and the sheer weight of reports that IFA are required to carry out to continue in business. It's no wonder that the older IFA is getting out of the market altogether and that younger people are not coming into the industry. It's interesting that the billions been injected into our banks is also being used to help promote their products and services in giving them an unfair advantage. What about subsidies to IFA's as we are not the ones that generate huge levels of complaints.
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Julian Stevens | 10 Nov 2009 5:35 pm
And what about the networks, which do 80% (if not more) of the FSA's hands-on, day to day regulation of its member firms?
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Evan Owen | 10 Nov 2009 5:44 pm
Well done FSA.
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Dathan Steele | 10 Nov 2009 5:54 pm
'What have the Roman's ever done for us'?!
Funny, if the fees had gone up by forty odd percent there would have been pages and pages of impassioned prose... but only one comment so far?!
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Simon Mansell | 10 Nov 2009 6:56 pm
At a time when millions of pounds have been pumped into the banking sector to keep them afloat this concession is welcome news. If the FSA can now have a looks at the have proposed changes to capital adequacy, the degree level examinations and the pending termination of half of the IFA sector post 2012 all will be forgiven!
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Phil Castle | 10 Nov 2009 7:34 pm
Don't get too excited don't forget that the loan from the Treasury to the FSCS for the banking collapse is on interest only at present and when it starts being repaid, this might overflow in to the advisory levy, hence any savings on FSA fees could end up going in increased FSCS fees!
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Anthony Badaloo | 10 Nov 2009 7:41 pm
Is this a hollow bluff? With the Tories promise to scrap the FSA, is it too little too late? Many IFAs would have gone to the wall by then to benefit anyway.
Cutting out most of the petty requirements may save us a lot more.
My buddy from Links thinks there should be a refund, like the bank charges scenario. Why not?
Any feeling of relief may be artificial, as the fees will still be astronomical compared to other professions, bearing in mind IFAs have an enviable track record in terms of complaints, compared to say solicitors.
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Lawrence Brennan | 10 Nov 2009 8:05 pm
I'm glad the FSA have now realised the transparency they preach would show the unfair distribution of costs they charge and that it needs to be addressed before they kill their golden IFA geese!
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F-Pack Wooden Spoon Team | 10 Nov 2009 8:27 pm
Come on boys and girls, lets not get sucked into the F-Pack. They are only trying to pretend to be friendly so we let our guard down.
Keep your bayonets and rifles clearly pointed at them until they put up the white flag and hand in their P45s and start sweeping our dirty streets.
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