Director general Chris Cummings says firms with more than 26 approved persons will see overall regulatory fees rise by around 90 per cent and in some cases firms’ fees will skyrocket by as much as 169 per cent.
Aifa says the FSA is endangering good firms and is now calling for a full review of FSA budgets by the National Audit Office.
Cummings says: “Every firm in the UK is facing great difficulty and trying to find ways of cutting costs. At this time the FSA is doing the opposite by asking good firms for an increase in costs which will result in consumers being charged more for advice.
“We were hoping for regulatory restraint but instead have seen proposals that endanger the survival of good firms.”
Cummings says IFAs are effectively paying for banking failures and good firms are being penalised for the actions of bad ones.
He says: “With this in mind we propose an inflationary increase of no more than 3 per cent for intermediary firms. It is true that the FSA needs to do more to regulate the banks – but they should meet this bill. Further the FSA, like every other organisation, has savings that can and must be made.
“The failings of the financial system rest with the wholesale markets. It is the banks and other organisations that should be forced to pay for their misadventures. The FSA should not expect our members to pay for the mistakes of others.”
Cummings says appointed representatives will not benefit from the fee freeze for small firms, and instead will have to “carry this additional burden”.
He says: “The cost of supervision has increased substantially since the introduction of the FSA. Never in the history of financial services have we had a regulator that has cost us so much. The budget set at £437m is astronomical. We will be calling on the NAO to investigate FSA costs and budgeting. We will also be calling for a full review to be carried out every year prior to the budgeting process to ensure that a full cost benefit analysis is carried out.”