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Advisers in line for consumer credit licence rebates

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The Government says it will launch a programme of rebates for advisers who are hit by new interim consumer credit licence charges.

A paper released by the Financial Conduct Authority today also confirmed a 30 per cent discount for all sole traders and firms who apply for an interim licence before 30 November.

Money Marketing revealed in July it had written to firms with a consumer credit licence requiring them to pay up to £350 for interim permissions as part of the new FCA-regulated consumer credit market.

The news angered advisers, many of whom had already paid for “indefinite” licences.

The 30 per cent discount will see firms pay £245 for interim permissions while sole traders would pay £105 instead of £150 with the discount.

Proposed interim charges relate to the period when regulation for consumer credit regulation is handed from the Office of Fair Trading to the FCA between April 2014 and April 2016.

The latest FCA paper says: “The Government, having consulted the OFT and FCA, has decided that as a result of the transfer of consumer credit regulation to the FCA in April 2014, there will be a programme of rebates to consumer credit licence holders to reflect the closure of the OFT regime at 31 March 2014. This is designed to ensure the cost of the transfer of regulation is proportionate.”

Details of the rebate system will be released in the regulator’s consultation paper due to be published in October.

Since 2008 most applications for consumer credit licences have been granted on an indefinite basis with firms expected to make a one-off payment to be granted a CCL, alongside five-yearly maintenance charges. 

The cost for these licences was increased to £670 from £575 for sole traders from 1 April this year and to £1,466 from £1,215 for partnerships or companies. This is accompanied by a maintenance charge every five years, costing £208 for sole traders or £505 for partnerships or companies.

Advisers need to hold a consumer credit licence if they spread their adviser charge over more than four instalments. Many advisers are also likely to hold a consumer credit licence if they advise on mortgages or provide debt advice.

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Comments

There are 12 comments at the moment, we would love to hear your opinion too.

  1. What a noble gesture – Even with this rebate it is still far too expensive. Still the FCA think we are all earning lots and that we should place food on their families table before ours.
    No doubt that there will be some additional costs for us multimillionaires to be announced in the next couple of weeks!
    ‘I’m an IFA, get me out of here’.

  2. Angry.com! I can’t believe they are sticking to these charges!! It would not stand up in court. I suggest a class action…thoughts?

  3. I would not worry too much as there will be no advisers left by April 2016
    Death by a thousand cuts
    I been missold a career- can I claim compensation form the FCA?

  4. I renewed my licence on an indefinite basis to the Office of Fair Trading last October at a cost of £575! Shouldn’t I be refunded on that?

    OFFICE OF FAIR TRADING! You’re having a laugh!

  5. Having paid £2,800 for 2 licences to cover both my businesses in the last 12 months I assume the dearly beloved FCA will also organise “pro rata” rebates of both these fees !
    They are out of touch !

  6. Maybe getting somewhere with this.

  7. We did not ask to be changed over to the FCA why should we pay?

  8. So lets get this right …
    I now get a discount for having to pay again for something that I have already paid for !!!
    the word THIEVES comes to mind .. !!!
    So can someone please tell me what EXTRA I will now get for having to pay again
    It can only happen to Financial Advisors … me thinks someone somewhere doesn’t like us boys and girls !!!

  9. She who shall remain nameless... 30th August 2013 at 10:21 pm

    Simples. Don’t pay for a licence. Can’t imagine the OFT are spot checking every firm of IFAs and asking to see their payment terms with clients.

  10. Let us make it very clear. The culprits are the Government not the FCA. The FCA were given the additional powers without the necessary funding and so have to raise the finance from us. The Government has failed to provide the money, 30% is inadequate but a clear admission of responsibility. Get off the back of the FCA on this one please and argue your case with your MP.

  11. Can someone tell me what is meant by ‘maintenance charge’? Apart from ripping us off!

  12. If we were given Key Facts about the license, they’d have to stick by the fact that it was an indefinite license. If a lender’s book is sold on, the consumers don’t pay an admin fee.
    At least the rebate and 30% is a step toward an apology

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