Aifa has expressed disappointment after the FSA rejected its proposals aimed at ensuring that IFAs paid a fairer share of regulatory fees.
The trade body first submitted evidence to the regulator in November 2009 which calcul-ated that IFAs paid a disproportionately high proportion of the FSA’s indirect costs compared with providers.
Aifa made two proposals – that indirect costs should be calculated according to the proportion of revenue advisers receive compared with the financial services industry or that adviser fees should be based on their proportion of revenue compared with providers.
In a consultation paper on regulatory fees and levies published this week, the FSA says the industry consensus is for a system either based on costs of regulating individual firms or their individual risk profiles.
The FSA says: “Given that the revenue model is moving in the opposite direction to this, we do not believe we can justify undertaking further research or work on it. However, we are happy to consider any further research undertaken by product prov-iders and intermediary market participants working together to address practical issues and impact for both.”
Aifa policy director Andrew Strange says: “I was disappoin-ted because I would like to see the regulator do more work on the concept of risk-based levies. If you look at the compensation directive coming through from Europe, there is a specific req-uirement for levies to be on a risk-based approach.
“IFAs and mortgage advisers do not present a systemic risk. The vast majority of our members do not hold client money and we did not cause the banking crisis, so we are lower risk and that should be taken into account in allocating our fees.”