FSA to lower minimum fee for IFAs by 45%
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.