Advisers will see FCA fees fall next year as a result of changes to regulatory fee blocks for firms that hold client money.
Many advisers currently fall into the A13 fee block, which relates to advisers who do not hold client money. A separate fee block, A12, exists for advisers, dealers and brokers who hold client money.
In a consultation paper on 2014/15 regulatory fees, published today, the FCA is proposing charging A13 advisers £68m in 2014/15, down by 19 per cent from £83.6m for the current financial year.
This is the result of proposals, announced in October, to merge the A12 and A13 fee blocks. The regulator is also creating a separate fee block, A21, for firms carrying out investment business where their permissions include safeguarding or administering assets.
The FCA is proposing charging A21 firms £13.4m in 2014/15, and keeping the minimum fee unchanged for 2014/15 at £1,000 per firm.
Some 42 per cent of firms in the A block paid the minimum fee in 2013/14. In total the regulator raised £18m from minimum fee firms in 2013/14 and proposes to raise the same in 2014/15.
The FCA says the fall in fees for A13 advisers is also due to the fact the 2013/14 fees included a £3.7m one-off amount covering the three-year RDR project costs.
In October the FCA said there was an “anomaly” in the way the A12 and A13 fee blocks interact. This meant that firms that hold client money were paying a lower fee per every £1,000 of income despite requiring less regulatory scrutiny.
Money Marketing revealed in November this meant A13 advisers had been overcharged by £118m over the past five years.