The Government’s move to award rebates and discounts to advisers hit by new consumer credit licence interim charges is unlikely to go far enough, warn advisers
A paper released by the Financial Conduct Authority last week confirmed the rebate programme plus a 30 per cent discount for all sole traders and firms who apply for an interim licence before 30 November. The size of rebates has yet to be announced.
Money Marketing revealed in July that the FCA 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, under which an additional maintenance charge is due every five years. The Government is still consulting on what will happen in such cases with a paper due next month.
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.
Kingston Independent Financial Advisers company secretary Sam Caunt says: “Thirty per cent is inadequate but a clear admission of responsibility.
“I think as we continue there is still a very realistic chance that we will have to pay more. The FCA is stretched as it is and will want advisers to pay for the resources needed to govern consumer credit.”
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 offer debt advice.