Aifa is calling on the FSA to review the total cost of regulation and the proportion paid by intermediaries.
Last November, the FSA proposed changes to the structure of fees for regulated firms.
The proposals would lower minimum annual fees for IFAs from £1,850 to about £1,000 a cut of 45 per cent. But Aifa says the revised fee structure does not accurately reflect the risk posed by the IFA and intermediary sector.
It says deposit takers account for 28.5 per cent of the FSA’s 2009/10 annual funding requirement while the intermediary sector accounts for 19.2 per cent.
Aifa says life companies and fund managers are paying disproportionately low fees at 12.2 per cent and 7.8 per cent respectively.
Director general Chris Cummings says: “An opportunity has been lost to examine the true cost of regulating the financial services community.
The investment and mortgage intermediary sectors now generate almost one-fifth of the FSA’s fees income. These firms do not present systemic risk.
“By comparison, the banks are paying remarkably little in fees according to the FSA’s statistics and not enough to cover the cost of the degree of regulation that is warranted by the systemic risk that they present.”
Highclere Financial Services partner Alan Lakey says: “Fees are there to ensure the FSA can regulate properly and the burden that firms place on the regulator should be reflected.”