Aifa is calling on the FSA to carry out a “reality check” on some of its plans for its new fee regime.
In its response to the paper on post-N2 fee-raising, Aifa says some of the proposals are “Draconian”.
It is particularly concerned about the plan to stop IFAs paying fees by instalments. It believes the FSA has not justified this decision or shown any awareness of the consequences for smaller firms.
Aifa wants the FSA to do a “reality check” and compare what firms will pay under the new regime compared with the old costs.
On the issue of penalties for late returns of data, Aifa says some penalty “may be justifiable if extra costs are incurred but a 50 per cent surcharge is Draconian”.
But Aifa welcomes the timing of the new fee regime which will not be introduced until financial year 2002/03. It says this will help firms prepare and budget for a possible increase in costs and a different phasing of payments.