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Advisers to pay bulk of costs as FCA budget hits £519m

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The FCA has set its budget for 2016/17 at £519.3m, with advisers paying a greater share towards the regulator’s costs than banks, insurers and fund managers.

The FCA business plan and budget, published today, represents an 8 per cent increase on the £481.6m FCA costs for 2015/16.

Of this, financial services firms will pay £469.8m in regulatory fees, thanks to a £49.6m rebate from financial penalties. The Treasury is paid the amounts levied in regulatory fines less retained enforcement costs.

The FCA is proposing that £133m, or 28 per cent of the budget, will fall on investment advisers and mortgage and general insurance brokers.

Banks and mortgage lenders are set to foot around £128m of the regulator’s costs for the year, while insurers are expected to pay around £60m.

The remainder of the FCA’s budget will be met by fund managers, consumer credit firms and firms that fall outside of the stated business types.

Who is paying for the FCA’s budget in 2016/17?

FCA budget

Most of the costs stem from the FCA’s operating costs, or ongoing regulatory activity. This has gone up 5 per cent over the year from £479m last year to £502.9m.

Staff costs have gone from £279.9m to £316.8m, while enforcement costs have fallen from £10.7m to £8.3m.

Overall, the FCA says the increase in its budget has been driven by taking on responsibility for supervising the consumer credit market, as well as changes to accountability rules and the mortgage credit directive.

In a separate consultation on fees and levies for 2016/17, the FCA says it will keep the minimum fee, paid by 37 per cent of regulated firms, at £1,084.

Advisers in the A13 fee block will see their share of costs remain relatively flat at £73.7m.

FCA acting chief executive Tracey McDermott says: “Over the next year we will continue to embed a sustainable approach to regulation in everything we do.

“The majority of our resources remain devoted to our core business and today we have set out the outcomes we want our work to achieve.  Transparency is important to us, and this plan will give all stakeholders an understanding of our focus for the year ahead.”


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There are 10 comments at the moment, we would love to hear your opinion too.

  1. A very well presented and costly Business Plan.

    What a pity that the FCA cannot carry out its functions in a sensible and balanced manner.

    What do you mean? You ask. Well, back in early November I applied for a simple variation of permissions to change my business from partnership to Limited Company. My £750 payment was banked very swiftly yet here we are 21 weeks later and they have yet to assign a case officer to even look at the application.

    No doubt they are too busy trying to batten down the hatches to protect themselves from the RDR and FAMR fall out.

    What business, other than an unaccountable quango, could operate and fail its customers this way.

    Treating customers fairly, indeed.

  2. Alan, perhaps it is about time they worked on a fee, part paid up front and the rest on completion. That would get them processing their work load quicker. Based on you present experience I guess I will be Ltd Co in 2020 then!

  3. Tracey McDermott says: “Over the next year we will continue to embed a sustainable approach to regulation in everything we do”

    Well as long as we’re all able to pay your fees FCA, we know it will be sustainable won’t it. The perfect business model. £1/2 Billion budget. Unbelievable.

    Oh and when she says Stakeholders – does that include us? It makes it sound like we have a choice in all this.

  4. If you watched the series 6 final episode of ‘The Walking Dead’ last night (yes I know) you’ll know that all we can do is also kneel on the ground in front of someone who might or might not be called Negan waiting to be coshed over the head by a baseball bat wrapped in barbed wire which he’s actually named as Lucille. And, if you don’t watch the walking dead (yes I know) it actually parallels real life where the powerful with their big weapons can do what they like. Do you see any resemblance to this situation there? Bet you never thought you’d see a reference to ‘The Walking Dead’ on here did you?

  5. Investment advisers, mortgage and general insurance brokers £133m

    Banks and mortgage lenders £128m

    Is it just me or does that seem the wrong way round?

  6. Its little wonder that this country can’t and doesn’t, make anything (British Steel about to implode) the only people making any money or can arbitrarily increase their budget by 8% are those who live off the backs and sweat of others, I give you the unaccountable quango that is the FCA

    “stakeholder” come on Tracey tell it like it is……. “financial slave” is more accurate

    Soon to be published the smallest book in the word………The FCA book on its achievements, it beat the french book on fidelity by quite a margin !

  7. Nick, adviser firms don’t have their own offices in FCA House.

  8. Whoa! Staff costs increase by £36.9m – in a year

  9. Of course we should pay the bulk of the fees of the FCA. It’s us they need to spend most of time and resource on in trying to sort out all of the bad advisers out there. We are the ones who nearly crippled the country leading to the credit crunch and financial crises through pure greed and high risk taking without a thought. We are the ones that give the FCA the biggest head aches in terms of trying to keep us under control and stop us from continuing to sell crap to the public like PPI and packaged bank accounts. It is the adviser community who have provided so much dodgy advice and poor advice leading to so much “consumer detriment” through sharp practices and sales techniques.
    Come on ladies and gents, just admit it. We are all living in denial and its time we all stopped bleeding about having to pay the bulk of the bill. Just do it because we are the route cause of everything awful that has gone on in the world of financial services……. NOT

    Tracey McDermott and Mr Whats his name from the PRA if either of you have one ounce of decency in your soul, you should make it your mission to give advisers a fair deal (thats all we ask) instead of letting the FCA continually cripple us out of business with your ever-increasing budgets.
    It is disgraceful for so called leaders of a regulator if you cannot see the injustice of how you allocate your fees and totally immoral if you can see it but continually do sweet FA to rectify it

  10. PRA Budget 2015 £236M in addition to FCA Budget £516m – Old FSA £536m :

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