The FCA has proposed a new way of funding the Money Advice Service which will see advisers hit with a 63 per cent increase in costs and a total MAS bill for 2014/15 of £4.4m.
The regulator has been consulting since January on reforms to the way the MAS levy is allocated. It initially proposed allocating MAS “money advice” costs based on its data of how consumers use the service, which it estimated would push down advisers’ costs by 93 per cent from £4.6m to £300,000.
After strong opposition from mortgage lenders, in April the FCA said the changes were being introduced too quickly. Advisers in the A13 fee block, which covers most advisers, paid £2.7m towards the MAS in 2013/14. In its consultation paper on regulatory fees and levies for 2014/15, published last week, the FCA put forward a new proposal for calculating MAS levies which combines three methods.
The first is based on how consumers use the MAS, while the second focuses on the service’s five outcomes: managing debt, saving regularly, saving for retirement, protecting assets and making provisions for dependants. The third is a levy based on FCA fees.
On this basis, advisers in the A13 fee block would pay a total MAS levy of £4.4m in 2014/15.
Plan Money director Peter Chadborn says: “It is still very difficult to get beyond the question of why advisers should pay towards MAS.
“But if we do have to pay for it, it is important the FCA continues to look at better ways of apportioning fees.”